Editorial: Financial literacy is key to student debt crisis
Share this post:
The student debt crisis illustrates the fact that two things can be true at the same time.
Yes, personal responsibility for financial decisions is critically important. But it is just as true that the cost of a college education has escalated in a way that is unreasonable and untenable.
Questions about how to handle the cost for those who already have been trapped by ludicrous costs with equally ludicrous loans loom amid calls for relief and challenges to President Joe Biden’s loan forgiveness plans. But that only addresses the people who already have been caught in the teeth of the higher education funding fiasco.
It doesn’t do anything to stop future graduates from being fed to the monster.
The best way to correct the problem isn’t just tuition freezes or even the occasional school like Washington & Jefferson that tries to roll back its costs. It isn’t pie-in-the-sky universities like Harvard or Princeton who say they will make their annual tuition free for students with family income under a certain threshold. It is not waiting for a billionaire to give a graduation gift of loan payoffs as Robert Smith did at Morehouse College in 2019.
It is making sure that students understand what they are agreeing to do.
Colleges like Penn State require a financial literacy class, but that’s for students who already have signed on the dotted line. Financial wellness is a program available at other schools like Pitt, but, again, that is for the people who already agreed to the deal.
The most important place to teach financial literacy is in high school. It is downright immoral that we allow 17-year-olds who are not allowed to enter into other contracts to sign away their lives into an indentured servitude in return for a degree they might never achieve. Even if a graduate is 18 at the time, that makes them only a nominal adult — the kind not trusted to drink or rent a car.
Kids need to understand money from the penny up before they agree to assuming a crushing debt load.
Programs like Pheple’s school credit unions can be an important piece of that. Kiski Area Cash Stash just joined Penn-Trafford’s Warrior Cash Stash and Greensburg Central Catholic’s Centurion Cash Stash as options that are available for students to use and also are student-run.
Before being shackled to education debt, students need real education in what debt is and how savings can impact it. They need to know when debt is good and when credit is a trap.
The most important test before applying for college shouldn’t be the SAT or ACT, not an AP English test or a Keystone test for graduation. It should be the ability to look at the tuition cost, look at the payment options, read the terms of a student loan and make an informed decision about whether it’s really worth it.