The Importance of Financial Literacy for the College Student

It is very important for today’s college students to be financially literate.  More and more college students will need to take out student loans, and will have to pay them back themselves instead of mom and dad paying for it.  College is incredibly expensive, not only is their tuition, but also book, materials, and living expenses. 
The cost of college has been on the rise for several years now, and it does not look as though that will change in the coming years.  Even though the cost of college has gone up, family income has remained stagnant at best.  This means more than ever students have to get loans to pay for their college expenses.
Student loans are on the rise, in fact they are second only to mortgages has the biggest debt that Americans are holding these days.  This could be a big problem if the student does not understand the debt that they are taking on, how they repay it, and when they repay it.  The more they know the better off they will be when they graduate.
Affordability remains a concern when it comes to student loans.   They are needed now more than ever, but it has become harder and harder to pay them back.  On average it takes about ten years to fully pay back student loans.  If the student has a hard time finding a job after graduation, or takes one that does not pay as well as they hoped, that amount of time can become even longer.
Some banks and credit unions have financial literacy programs in place at high schools near their branches, this is not good enough.  These banks and credit unions need to also be partnering up with colleges and universities to provide these programs to college students as well. 
Many college students also get credit cards to help them pay for day to day things like groceries while in school.  The parents sometimes will agree to pay a certain amount of the credit card bill to help.  The Credit Card Act of 2009 has put important protections and safeguards in place for these young adults.  However terms, conditions, and other financial products are not always transparent.  That needs to change.  Not completely understanding the terms and conditions could end up getting the student in trouble and costing them a lot of money.
If the student has never taken a financial literacy program before, it is a good idea to check into it.  Find out if the college or university they are going to offers them.  Talk to your local bank or credit union branch and see if they ever hold any.  Find a program and go.  The parents should go with the student to the program.  Most parents feel they do not need to, that they have been dealing with banks or credit unions and such long enough that they know what they are doing.  Going to the program with their student not only provides support for the student, but also keeps the parents and students on the same page.

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