1. Katie Sam UW-Stout Senior CREDIT AND DEBT MANAGEMENT AMONG COLLEGE STUDENTS: PRACTICES AND IMPLICATIONS

2.  Credit – Ability of a customer to obtain goods and services before payment  Debt – State of owing money If you use credit, you accumulate debt CREDIT AND DEBT

3. FINANCIAL MARKET IS GROWING IN BOTH SIZE & COMPLEXITY

4.  Easier for Average American to:  Invest in the Market  Manage Own Stock/Mutual Fund Investments  Set Up Various Savings Tools  More Young Adults Have Access to Credit to:  Pay for Education  Make Ends Meet  Make Major Life Purchases OPPORTUNITY FOR GREAT REWARDS

5. Benefits: Control Their Finances Achieve Their Dreams Benefit from Investments OPPORTUNITY FOR GREAT REWARDS Dependent on: Their Ability to Make Self- Beneficial Financial Decisions

6.  Ability to Understand How Money Works:  Earn, Manage, Invest, & Donate It Financial Literacy Self-Beneficial Behaviors  College Graduates are Financially Literate  Only 34% of Americans Graduate  Financial Literacy is Declining (Mandell) 1997 2000 2002 2008 57.3% 51.9% 50.2% 48.3% FINANCIAL LITERACY

7. US CONSUMER DEBT TRENDS

8. US CONSUMER DEBT IS RISING

9. FASTEST RISING DEBT IS STUDENT LOAN

10. STUDENT LOAN DEBT The 70% of 2012 Graduates with Student Loan Debt Averaged $29,400 (Reed & Cochrane, 2013). (Louis, 2013).

11.  70% Increase in College Freshman with Cards  Median Debt at Every Grade Growing CREDIT CARDS SALLIE MAE, 2009

12.  Rising Cost of Education  1981: $8,438  2011: $19,339  Difficult to Work Full-Time Debt is not always Bad DEBT MAY BE NECESSARY

13.  Use Credit to Live Beyond Your Means  40% Respondents Charged Item Knowing They Didn’t have the Money to Pay (Sallie Mae, 2009)  Accumulating Debts Aren’t Paid Off  Failure to Recognize Costs Associated with Borrowing Money BAD DEBT PRACTICES What Students KnowWhat They Don’t Know Credit LimitLate Fee Payments Current BalanceOverbalance Fees Interest Rates

14. STUDENTS AT UW-STOUT

15. SENIORS HOLD MORE DEBT/CARDS Total Debt # Cards

16. Correct Response Rates What Does a Credit Score Measure?44.64% When Can You Check Your Credit Report? 75.89% Who Has Access To Your Credit Report? 58.93% What are the Three Major Credit Reporting Bureaus? 34.82% Average53.57% FINANCIALLY ILLITERATE STUDENTS

17. Pinto & Mansfield, 2006 DOUBLE JEOPARDY : HIGHER OUTSTANDING CREDIT BALANCES ARE ASSOCIATED WITH HIGH STUDENT LOAN DEBT

18. DOUBLE JEOPARDY

20. Two + Loans Student Loans No Loans What Does a Credit Score Measure? 40%47%45% When Can You Check Your Credit Report? 96%73%76% Who Has Access To Your Credit Report? 80%53%66% What are the Three Major Credit Reporting Bureaus? 67%19%55% Average 71%48%60.5% CREDIT KNOWLEDGE BY LOAN

21.  13% Believe Debt is not Manageable  12% Admitted Using Cards to Live Above Their Means  20% Admitted to Making a Purchase Knowing They Didn’t Have Money RED FLAGS

22. LONG TERM IMPLICATIONS

23. HOUSEHOLD UNDER 40 DEBT PEW RESEARCH

24. DEBT-TO-INCOME RATIO PEW RESEARCH

25. DIFFERENCES IN INCOME AND NET WORTH PEW RESEARCH

26.  Accumulate More Debt  Harder to:  Pay off Debt Quickly  Save Early for Major Purchases & Retirement  Accumulate Assets  Impede Ability/Desire to take out Small Business Loans LONG TERM CONSEQUENCES

27. THANK YOU