GIVING BACK: Teaching Financial Literacy

Vol. 30 No. 1

By

Anthony Leahy (tony@centsprogram.org) is executive director of Consumer Education and Training Services (CENTS), a nonprofit organization dedicated to helping people make informed financial and legal choices.

“The next generation is starting their economic race 50 yards behind the starting line.”—Elizabeth Warren

There is a perception that young adults are spending their way to financial oblivion on shopping sprees for iPhones and wild spring breaks. However, it is much more likely that the bulk of a young adult’s money, or future money, will be used to pay the exorbitant costs of getting a college education and the enormous student loans that come with it.

The average student loan debt has more than doubled in the last ten years, according to the Project on Student Debt. In her book Strapped (Doubleday, 2005), Tamara Draut writes that in 1977, students spent $6 billion to get a college education, compared with $28 billion spent by students in 1993. By 2003, the most recent figures available in her book, the amount had doubled to $56 billion. This figure continues to skyrocket. If you think the increase can be explained away by higher student enrollment, think again. Though the number of students enrolled in college did grow by 44 percent between 1977 and 2003, the student loan volume rose by 833 percent during that same period.

This is where the organization I work for, Consumer Education and Training Services (CENTS, www.centsprogram.org), steps in. CENTS was cofounded by the Honorable Karen A. Overstreet, a U.S. bankruptcy judge in the Western District of Washington, and members of the bankruptcy bar to focus more attention and effort on financial literacy in King County, Washington. The student loan crisis, evidenced by higher numbers of bankruptcy debtors attempting to discharge student loan debt, provided the impetus for the organization.

CENTS received a grant from the Consumer Protection and Education Fund to create Debt-Slapped, a 40-minute educational DVD and website (www.debtslapped.org) aimed at high school and college students. The video and website teach students about the factors behind the debt explosion and the urgent need for them to make wise financial choices. Our goal with Debt-Slapped is to create informed, financially literate young consumers. We also want to encourage students to be concerned and active citizens who take proactive measures to secure their financial future. The debt crisis resulted from the actions of people, and people can reshape and reform how that crisis is resolved.

Debt-Slapped has reached more than 100,000 students thus far. Teachers love how the video engages students on the seemingly dry topic of personal finance, and students appreciate its interesting visual style and frank content. It’s a tool we hope you will use as a volunteer in a classroom in your community to teach students about financial literacy. Judge Overstreet and I have learned from the students we have met in our visits to local high schools that they appreciate our taking the time to talk with them, and they especially enjoy a good war story. Judge Overstreet and I have also taken a PowerPoint lesson we developed into the classroom. Judge Overstreet shares legal tales of woe and triumph, while I describe some financial pitfalls I’d like them to avoid. We also offer tips and pointers for making wise decisions on how to finance their college education.

If you want to help students in your community avoid future financial turmoil, I encourage you to visit our website to learn how you can help. You can get a free copy of the DVD, or watch it online, and learn more about the project. We encourage you to make a contact at a local high school, screen the video, and offer to take questions from the students or present our PowerPoint, which you can also get from the website. Financial literacy work is just one piece of the puzzle. We hope you will work on a pro bono project or volunteer on a legislative advocacy effort that helps build the future of young people. Now more than ever, they need your help.

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