As today’s young people prepare for college – and for life after it – they’re facing two distinct challenges to their future financial health.
- Student Debt
The Wall Street Journal reports that average student debt is rising and more students are taking out loans to finance college. More specifically, it says more than 70 percent of bachelor’s degree recipients will graduate with a student loan, compared with less than half twenty years ago.
- Financial Literacy Education
While these trends continue to rise, so does the need for financial literacy among the next generation of college students: Generation Z. According to a national study from Northeastern University, 75 percent of students aged 16 to 19 don’t have a college savings plan, 29 percent say their parents have never talked to them about saving for college and one-quarter think that no amount of student loan debt will be manageable after college.
One solution that can help teens prepare is the Financial Reality Fair developed by the National Credit Union Foundation. These experiential learning sessions, run through credit unions and credit union leagues across the nation, allow teens to encounter some of the financial challenges they’ll face when living on their own.
Each fair is a hands-on experience where students are asked to identify their career and starting salaries, and then prepare budget sheets that require them to live within their monthly salaries while paying for basics like housing, utilities, transportation, clothing, food and other expenses. Throughout the fair, they face temptations for additional spending and learn to balance wants and needs. After the drill, they work with a financial counselor to review their budgets and discuss the importance of living within their financial means.
There’s an easy way you can have an impact on Generation Z’s financial literacy as well, and it’s just a few clicks away.
At CUNA Mutual Group, we’ve launched a holiday giving campaign that allows credit unions, state leagues, members, and anyone who’d like to support Generation Z through the Foundation’s Financial Reality Fairs by sharing photos or videos of holiday giving or volunteer efforts using the hashtag #CUGiveBack through Twitter, Facebook or Instagram by December 31.
For every post the CUNA Mutual Group Foundation will donate $5 – up to a total of $10,000 – to the National Credit Union Foundation to support these reality fairs for teens.
With this donation, the Foundation estimates it will be able to support 20 additional Financial Reality Fairs next year, reaching 100-250 students per fair, or up to 5,000 more teens than in 2015, providing needed financial education to Generation Z.