America has fallen woefully behind in providing adequate financial education to students and families, especially when it comes to student loans. Recent progress by government agencies, financial institutions and schools themselves is making up for lost time, but many college graduates still face significant student loan debt that could affect their lives for decades to come.
That message formed the focal point of an open hearing Wednesday by the Financial Literacy and Education Commission, a division of the U.S Department of Treasury, on the University of Wisconsin-Madison campus. The event drew participants from the public and private sectors to discuss the need for greater financial literacy, a situation that may have reached crisis proportions in the effect its having on individuals, families and the nation at large, according FLEC Vice Chair Richard Cordray, director of the Consumer Financial Protection Bureau.
“The neglect of financial education can undermine progress in any nation organized around a free market and founded on a regime of personal responsibility, like the United States,” Cordray said in his opening remarks. “Yet Americans have neglected this important matter. “
Cordray was one of six speakers to offer opening remarks, a list that included Rebecca Blank, the former acting U.S. Secretary of Commerce who is now chancellor at UW-Madison, and Melissa Koide, assistant secretary of the Department of Treasury’s office of consumer policy.
The majority of the two-hour hearing focused on panel discussions that brought together financial industry and social service experts to discus several aspects of financial literacy and when it should begin in the lives of the eventual students that it will affect. The group’s consensus said education should begin as early as possible, starting will family discussions and financial education in elementary school whenever possible.
Royal Credit Union, located in Eau Claire, Wis., is a key supporter of financial literacy, according to panelist Jennifer Block, community relations manager for the $1.3 billion community institution that serves more than 130,000 members in Wisconsin and Minnesota.
RCU this year will open its 27th in-school branch, a program that will then support branches in 17 elementary schools, five middle schools and five high schools. The credit union has hired some 2,500 student-employees to operate the school branches over the years, Block said.
The experience offers students not only financial educations, but enlists them as financial literacy advocates among peers and their families, she added.
“The kids are in the trenches doing the work and encouraging their fellow students to save,” Block said. “Similar opportunities can be provided by just about any organization.”
Panelist Alex Martinez, a past participant of RCU’s school branch efforts and now a student Chippewa Valley Technical College in Eau Claire, was a strong advocate for RCU’s program and, in fact, any opportunity to provides students with hand-on experience in managing their own money.
“I’ve benefitted greatly from this program,” Martinez said. “This was a life-changing experience.”
The future of financial literacy is very bright, Block said in her testimony. She further called on all financial institution professionals to do what they can to support such efforts.