According to an article in the Star-Telegram, one-third of college students have at lease four credit cards each and the number of youth aged 18 to 24 years old who have filed for bankruptcy has increased 96 percent in the past 10 years.
In an effort to decrease the number of bankruptcy filings by young people, Senator Patty Murray, D-Wash. is proposing legislation that would provide $1.2 billion in grants over five years to institutions who promote financial literacy education beginning in grade school and throughout adulthood
The article said:
Murray’s bill, co-sponsored by Sen. Thad Cochran, R-Miss., would provide grants to state education agencies that agreed to establish financial literacy standards and assess how well students were doing in elementary, middle and high school. Nonprofit organizations also would be eligible for grants. In addition, grants would be available to community and four-year colleges to offer financial literacy classes for their students and for older adults.
This program could be extremely helpful to youth who find themselves mired in debt before they even graduate college. Because of financial ignorance, too many youth are forced to file bankruptcy before they even find their first real job out of college. Today’s foreclosure crisis a perfect example of what happens when you have a population that does not understand how credit/debt works. This financial ignorance doesn’t just harm them; it can send the entire financial system to the edge of bankruptcy.