by Daniela Ocana
As graduation approaches, high school seniors are spending their last moments of high school with a vague idea about what’s coming regarding their financial future. The absence of finance taught in American high schools has left students unprepared for the dangers of high student loans that end up becoming a lifelong commitment to pay off. The ability to understand how money works in one’s personal life especially for students who are looking for ways to pay for college is crucial.
A social economics major from the University of Illinois, Arianna Becerril, shared how her college debt was dealt with and her response reflected the weight many young adults carry when it comes to student debt: “I had borrowed around $32,000 in federal student loans. It took me almost 18 years to pay off my college debt”. Student debt can be very high due to the fact that financial discussions are taking place far too late. The fact that student debt has doubled over the past decade shows the negative effects of the absence of financial literacy in the American educational system. According to the board of Governors of the Federal Reserve System, the total U.S. student loan debt amounts to approximately $1.6 trillion, and 2018 college graduates with loans owed around $29,200 on average. Based on studies from Investopedia, That’s a 33% increase from 2014’s overall student debt of $1.06 trillion. This can explain the lack of preparation that students face once they’re late about learning finances.
Money is a huge part of your life and the importance of managing it, budgeting appropriately, and putting aside your “wants” for your “needs” is one of many great financial decisions that will help you dodge overwhelming consequences. "As I work with youth who are planning for their future, I encourage them to set aside emergency savings.” says Toiria Baker, Program Manager at Economic Awareness Council. “Some times that small amount of money you put away over time can help keep you from having to turn to credit cards to help you out of a jam”.