STUDENTS IN NH GRADUATE WITH HIGHEST DEBT IN U.S. – CREDIT UNIONS OFFERING SOLUTIONS
The good news is that America’s high school graduation rate has hit an all time high, according to findings of the U.S. Department of Education. The bad news: the nation’s higher education dropout rate has also hit an all time high, according to a recent study from The American Dream 2.0 coalition. More students pack their bags for home over financial/credit debt than academic performance. Those lucky enough to graduate are confronted with student loan debt, which averages $27,000.00, throughout the U.S. College students in New Hampshire owed the most, with average debt of $32,440.00. Many of these problems could have been alleviated with adequate financial literacy education prior to graduating from high school. The New Hampshire Credit Union League (NHCUL) in partnership with America’s Credit Union Museum (ACUM) has led the charge in educating New Hampshire school children on basic financial literacy through the CU 4 Reality™ Financial Education Program – in part with Financial Literacy Month events.
“What we know is that college students are ‘signing on the credit card and student loan dotted line,’ not realizing the full financial responsibility of these financial contracts,” according to Daniel F. Egan, Jr., president of the NHCUL. “Student debt in this nation is reaching an epic level of more than $1 trillion dollars - $1,000,000,000,000.00 - and the financial stress is taking a toll on students via an increase in dropout rates,” added Egan. Financially stressed students are six times more likely to drop out, which decreases their income earning potential, coupled with student loan obligations, which are unforgivable. According to a recent study by the Credit Union National Association (CUNA) of high school students: “83% did not know the rates and 77% didn’t know the duration of their expected or existing college loans….the results suggest that some students could be challenged in managing basic expenses or using such payment tools as credit cards in a consistently responsible manner as they enter adulthood.”
“The goal of the CU 4 Reality Financial Education Program is to teach students the basics of spending, budgeting, credit and savings, with the use of a classroom guide, that can be tailored to educate elementary, middle, and high school aged students. The goal is to establish good financial habits at a young age – habits which will last and benefit them for a life time,” said Egan. The curriculums’ culmination is the CU 4 Reality Financial Education Fair. The CU 4 Reality Financial Education Fair itself is a group event in which the students choose a fictitious ‘financial life’ (a job and an income) and they must determine how they are going to budget for needs and wants. They need to allocate funds for rent, utilities, insurance, credit card and student loans – then decide what they can afford to spend on discretionary expenses. “Tough choices have to be made,” stressed Egan. In April alone approximately 1,700 students from the following communities – Londonderry, Portsmouth, Nashua, Derry, Concord, Berlin, Gorham, and Manchester participated in CU 4 Reality Financial Education Fairs. For 2013, the NHCUL predicts that more than 4,500 students will be reached via 35 participating schools.
“Credit is being extended to this segment at a younger and younger age. It is the goal of New Hampshire’s credit unions to educate school age residents of financial options and help them avoid certain financial pitfalls,” stated Egan. “Credit unions serve and advocate for their membership – these are member-owned businesses. For student loans, credit unions provide better interest terms, and student loan default rates for credit unions are 1.6% - well below the student federal loan default rate of more than 12%. April was Financial Literacy Month for credit unions, and New Hampshire’s credit unions are proud of the service and community outreach they provide 24/7/365,” concluded Egan.