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THE COST OF FINANCIAL ILLITERACY WHAT YOU DON’T KNOW COULD REALLY HURT YOU!! COULD REALLY HURT YOU!!

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Presentation on theme: "THE COST OF FINANCIAL ILLITERACY WHAT YOU DON’T KNOW COULD REALLY HURT YOU!! COULD REALLY HURT YOU!!"— Presentation transcript:

1 THE COST OF FINANCIAL ILLITERACY WHAT YOU DON’T KNOW COULD REALLY HURT YOU!! COULD REALLY HURT YOU!!

2 SOME SOBERING STATISTICS ON AMERICA’S YOUTH AND DEBT The average student graduates college with between $3,000 and $4,000 in credit card debt College seniors who graduated in 2010 carried an average of $25,250 in student loan debt

3 LACK THE KNOWLEDGE O Nearly 60% of college freshmen max out their credit cards by the end of the year. O Nearly 77% use credit cards for food, clothing and entertainment. O Over 70% have no idea what the interest rate is on their credit cards. O Nearly 50% report paying late fees, over-the-limit fees, or had a card canceled due to delinquency.

4 ILL-FATED CHOICES O 20% of graduating college students have $10,000 or more in non-school related credit card debt. O Students who have high credit card debt are more likely to work longer hours and have lower grades. O Colleges and Universities say they lose more students to credit card debt than to academic failure.

5 EDUCATION ISN’T HAPPENING AT HOME 16-to-18-year-olds are more likely to own an iPod, cellphone or computer than they are to have a savings or checking account. Parents are more likely to nag their teens about cleaning their rooms or discuss the dangers of drugs and alcohol than talk about smart money management.

6 AMERICA HAS A FAR LESS MOBILE SOCIETY THAN IN THE PAST 62 percent of Americans raised in the top fifth of incomes stay in the top two-fifths 65 percent born in the bottom fifth stay in the bottom two- fifths

7 INVESTING IN YOURSELF TRADITIONALLY, IT’S BEEN BELIEVED THAT EDUCATION IS ONE OF THE SAFEST AND HIGHEST VALUE INVESTMENTS AROUND.

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9 TOTAL COLLEGE COSTS HAVE GROWN 42%

10  On average, a degree will provide $1.3 million in additional lifetime earnings.  One in five undergraduate degrees produce average earnings no greater than those of a high school graduate.  Degrees that teach applied skills have unemployment rates far below the national average, while general degrees are far above average.  Those with Actuarial and Pharmacology degrees have unemployment rates of zero.  Graduates with Architecture degrees, 10.6% History and Fine Arts, 15.4% and 16.2% respectively. PERSEVERANCE IS NOT ENOUGH!!

11 Default Rates, % with Debt

12 Average Debt at USF

13 Impact on Florida’s Workforce O FL Unemployment— 7.1%, Competition for Jobs is Tough O Employers and Credit Reports (47%) O Damaged Credit = Difficulty Finding Good Jobs/Any Jobs O Future wage earnings

14 What’s Happening at Work? Studies Show Workers with Financial Problems:  Absenteeism Up  Poor Performance Ratings  Excessive Time— Personal Financial Issues  Productivity Down

15 Impact on Personal Wealth & Expenses Floridians, Age 18-30, Seeking Credit Counseling in 2013 O Average # of creditors: 4-8 O Almost 1,000 bankruptcy filings O (-$32,000 net worth) O Average FICO score: 526-571 O Poor Credit Scores Lead to Higher Interest Rates for Cars, Other Consumer Goods ($$).

16 What colleges and employers wish…. Students enter with Students enter with: O a cursory understanding of vocabulary, i.e., debits, credits, interest rate O a familiarity of basic financial concepts O experience in creating a budget O an understanding of what school costs O a plan to pay using financial aid, parent help, part time work


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