LAS VEGAS -- The rising cost of college and campus credit card offers are contributing to the increasing indebtedness of college students on campuses everywhere across the nation and credit unions can be part of the solution.
As college students are forced to take out student loans to get the education necessary for success or plied with credit card offers on campus, credit unions can educate students on how to better manage it, Generation Debt: Why Now is a Terrible Time to Be Young author Anya Kamenetz, 26, told America's Credit Union Conference & Expo.
Tuition is up three times inflation, state support for colleges is at its lowest point in a couple generations and individual students are bearing the brunt of it, often putting text books as well as social expenses on a credit card, she explained. "Student loan debt arrived out of almost nowhere to a phenomenon of affecting nearly all students today," Kamenetz commented.
Additionally, 91% of college seniors have a credit card with an average balance of $2,864. Savings for people under 35 is--16%.
The impact of these burdens are not just financial, but psychological. She outlined the life of 30-year-old Myriam who had to stop going to school full-time after her mother lost her job and started working to pay for the essentials and taking out even more loans to fund college. Once she got her degree in the arts she decided to go into a more stable job than what she had studied for so she could pay off her debts.
Kamenetz noted that 37% of student loan borrowers cannot afford to go into social work and 23% cannot afford to teach. She also cited a survey that showed 48% of student borrowers experienced anxiety or sleeplessness over their debts.
"If saving is empowering, then what is borrowing?" Kamenetz asked.
Credit unions can be part of the solution by offering alternatives, providing financial education, and encouraging savings, she said. Kamenetz said she was excited to be at CUNA's conference because this type of financial education "is so in line with your mission to reach the next generation." She added, "I really think you can help them if you understand where they're coming from."
Some things that are at the foundation of credit unions are their nonprofit structure and community work. "That
word nonprofit is a magic word for them,"
She urged credit unions to help push for legislation to put financial literacy in the national education curriculum.