The Average College Student Graduates $24,000+ in Debt, Maybe the Best Grad Gift is a Credit Education
Carrie Coghill, director of consumer education for FreeScore.com, reflects on her daughter's upcoming graduation
Norwalk, Conn. — May 12, 2011 — An April FreeScore.com survey revealed that only 27% of Americans had a personal finance course offered to them in high school, yet 85% thought such a course would be beneficial. Couple that with the fact that as reported in the New York Times, "last year, graduates who took out loans left college with an average of $24,000 in debt." It all adds up to graduates needing a basic education in personal finance. So, perhaps the best gift to give a new graduate is credit education.
Said Carrie Coghill, director of consumer education for FreeScore.com, "As I was thinking about what to get my daughter for graduation, I found myself torn between things she wants and things she needs. I realized in the long run, my daughter obtaining 'needed knowledge' on how to manage her finances and credit would take the cap. And yes, I am biased because I am the director of consumer education for FreeScore.com."
Additionally, student loan debt has outpaced credit card debt for the first time. This means new graduates will be paying off their loans for longer periods of time than previous generations, leaving less money for savings. This means those graduating college now have a particularly dire need for personal effective financial management.
On top of all that debt, the economy that new graduates will be entering to search for jobs is rough, though improving.
Said Coghill, "All these factors make financial knowledge and credit management savviness imperative for new graduates' financial futures. Financial blunders they make now, like racking up too much credit card debt that they can't pay off, missing debt payments, or not having any savings, could haunt them and their credit scores for the rest of their lives.
"Unfortunately, the consequences of a generation lacking financial literacy have been made clear with the recent financial crisis. I hope that if the next generation is more informed, they will avoid another economic collapse."
The 2011 Consumer Financial Literacy Final Report revealed "many adults (41%) would give themselves a grade of C, D, or F on their knowledge of personal finance." FreeScore.com defines this lack of credit knowledge, "The Credit Knowledge Gap."
Said Coghill, "A country failing financial literacy is unacceptable. If we are slow as a nation to adapt financial literacy into formal education, it is our responsibility as caring adults to give our children the gift of financial knowledge - to empower them to make responsible and credible financial choices."
Instead or in addition to a hot ticket graduation present like money, an iPad, or a vacation; Coghill recommended these articles from CreditFYI.com, as a needed and beneficial graduation gift:
- How to Become Debt Free in 12 Steps
- How to Create a Budget
- Household Budget Calculator
- How to Consolidate Your Student Loans
Concluded Coghill, "Of course, I will always be my daughter's biggest supporter and biggest financial advisor – whenever she wants help from her good old Mom, but I know it is necessary that she be able to handle her finances like the intelligent graduate she is, all on her own."
About FreeScore LLC
FreeScore.com is the leading online consumer credit service, providing members with affordable, unlimited access to all three credit scores and their complete credit profile. For more information, go to FreeScore.com.