SOURCE: NCHELP (National Coalition of Higher Education Loan Programs) 

 

Thanks to Paul Garrard for the following:

 

A recent survey by KRC Research for the Association of Credit and Collection Professionals (ACA) reports that an overwhelming majority of Americans feel consumers are taking on too much debt.  However, perhaps more startling is that 72 percent of those responding believe that it has become more acceptable over the past decade for consumers to not honor their debt obligations.

 

In his presentation at the recent NCHELP Debt Management Conference, Carl George, CPA, referred to the lack of financial literacy as a "national problem" and cited numerous supporting statistics on the consumer borrowing habits of Americans:
· 43 percent of American families spend more than they earn
· Americans carry an average credit card balance of more than $8,500
· Financial emergencies would be handled by borrowing from family members (51 percent), selling something of value like their house or car (49 percent), and filing for bankruptcy (24 percent)
· College students carry an average of three credit cards with a total balance of over $2,700

There is no doubt that the importance of financial literacy programs continues to grow, and in the student loan community financial literacy programs have become an especially effective tool in preventing student loan delinquency and default.  This was referenced numerous times at the recent 2005 NCHELP Debt Management Conference in the featured afternoon sessions on financial literacy, and is also referenced in the recently released NCHELP Debt Management Practices Survey results (see Morning Briefing, April 18, 2005).  Those results indicate, in part, that 61 percent of the "end users" for debt management and financial literacy programs prior to matriculation are targeted to parents and family members, and not just to students.  Therefore, while the student loan community is working to help educate potential students and borrowers on the importance of money management and responsible borrowing, the parents and family members of these potential students and borrowers may be benefiting from these programs as well.

 

The entire survey results from KRC Research can be found at www.acainternational.org/media.aspx?cid=6287. Presentations on financial literacy from the Debt Management Conference can be found on the NCHELP Web site in the e-Library.

Gregory S. Davis
Policy Advisor
Office of Congressman Rubén Hinojosa
2463 Rayburn House Office Building
Washington, D.C. 20515
(202) 225-2531
(202) 226-8010 (Direct)
(202) 225-5688 (Fax)
Greg.Davis@mail.house.gov