Higher education nowadays and in the past, both seem to be the best investment for people around the world, it provides people a path out of poverty and upward mobility. However, with the rising cost of higher education in the U.S., students with low income face more difficult challenges today than in the past.
With the continuous growth in tuition costs in America, many American students have no choice but to apply for student loans to pay for their college tuition fees. Even though student loans can help students meet their financial needs, without providing them with financial literacy courses students experience stress as the debt piles up (Robson & Farquhar & Hindle, 2017).
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As many college graduates end up facing an unprecedented amount of student debt today (Totty, 2016), It’s critical for the country to promote financial literacy courses at school, because financial literacy courses not only educate students about debt management but also educate students different types of saving so that they can handle their finances well and discourage them to avoid student loan debt (Watkins 2015).
Watson and Bryan (2014) believed that it is important to preserve the promise of higher education in the U.S., however, student debt not only affects college enrollment and ensures American students access to their “American Dream”, but also promotes economic crisis, causing a new threat to national security.
According to PR Newswire (2014), “Many students who are struggling with student loans don't realize the consequences that come with letting your student loans go into the default”. Student loan debt not only has a negative impact on education, Kim (2018) and Swanson & Melin & D’Cunha & Radosevich & Farley & Schmitz (2013) believe that the student debt burden also drags down students’ careers, financial futures, families, and lifestyle choices, For example:
- A large majority of American adults (84%) report that many of them are unable to begin or increase their retirement savings because their student loans aren’t paying off (Tiaa 2019).
- Many female lawyers graduate with huge amounts of negative wealth because they have no choice but to take on a large number of students debt for education and to start their careers (Sieg & Wang 2018)
- To many, becoming a homeowner is still a part of the American dream. According to PR Newswire, ”Twenty-somethings are not borrowing money to buy houses at the rate they were a decade ago, a trend that may have as much to do with high levels of student debts...”
Over the past few decades, more and more occupations require their workers with at least college degrees, but many American students fail to enroll or complete a college degree because of the rising cost of higher education. On November 12, 2015, millions of American students across the country held a protest rally movement against student debt also demanded free public higher education (Jeje & Rodriguez 2016).
There’s no doubt that America’s higher education and student loan systems are broken and need to be reformed, but promoting financial literacy programs at schools, colleges, and universities also provides significant effects on our society, helps students develop basic financial concepts, manage their money better and avoid financial mistakes.
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