Push for financial literacy spreads to schools
More students taught to avoid the dangers of credit-card debt.
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Among college students, 55 percent acquire their first credit card as freshmen, and 45 percent are in debt by $3,066 on average, according to a 2003 Senate resolution which asked Bush to declare April as Financial Literacy for Youth Month. Since then, Congress has declared the month National Financial Literacy Month each year.Skip to next paragraph
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Students never learn how to use the cards, says John Ninfo, a bankruptcy judge in Rochester, N.Y. Schools don't teach them, and our culture sees money as so private that many parents don't talk to them about it. In 2002, he founded a volunteer organization called Credit Abuse Resistance Education, or CARE, but he started speaking in schools long before that after watching families unravel in his courtroom.
"I would ask them things like when they had two or three times their average income in credit-card debt ... I would say, 'Well, didn't you have a budget?' " he says. "What I got was this deer-in-the-headlights look like, What are you talking about? And at that point, a number of them said to me, maybe if someone had come into my high school and told me about these things, maybe I wouldn't be here today."
Today CARE is active in all 50 states, propelled by volunteer bankruptcy judges, attorneys such as Kobert, and others who visit high schools and colleges and share what they know firsthand. Among the lessons: that "your credit score will be more important than your transcript, and if you don't learn these things, the consumer-credit industry will take advantage," Mr. Ninfo says. The organization now is partnering with a PBS station in Fort Wayne, Ind., to produce DVDs for high school and public libraries nationwide.
"Everybody now realizes this is the most reachable moment that we've had in two decades, and that the public is actually listening," Ninfo says. "What's happening now is that ... on TV, you're now getting these financial literacy tips on how to save money by clipping coupons. So the media has kind of picked up on this, and the public is listening because they're scared."
In Florida, the need is acute. The state is among the hardest-hit by home foreclosures. Kobert joined CARE after he noticed debtors were getting younger and his own teenage son was getting credit-card applications in the mail. He partnered with another bankruptcy attorney to start an Orlando chapter, and with some funding from the Central Florida Bankruptcy Law Association, the group trained more than 50 attorneys last fall to teach personal finance in high schools and colleges throughout the region.
"Students have told us after we taught this class, I wish my parents knew what I know now," he says. "We missed our generation. We'll get this one."
It's a start, but the best answer to our "national epidemic of financial illiteracy," as Ninfo puts it, is to make personal finance education and testing mandatory for schools.