the cost of financial illiteracy what you don’t know could really hurt you!! could really hurt...

THE COST OF FINANCIAL ILLITERACY

WHAT YOU DON’T KNOW COULD REALLY HURT YOU!!

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

LACK THE KNOWLEDGEO 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.

ILL-FATED CHOICESO 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.

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.

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

INVESTING IN YOURSELF

TRADITIONALLY, IT’S BEEN BELIEVED

THAT EDUCATION IS ONE OF THE SAFEST AND

HIGHEST VALUE

INVESTMENTS AROUND.

TOTAL COLLEGE COSTS HAVE GROWN 42%

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!!

Default Rates, % with Debt

2006-07 2007-08 2008-09 2009-10 2010-11 2011-120%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

53% 53%

52%

52%

53%

57%

2.7% 4.2% 4.9% 6.3% 6.8% 5.5%

4.6% 5.2% 6.7% 7.0%8.8% 9.1%

% of USF under-graduates with debt

USF Default rate

National de-fault rate

Average Debt at USF

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12$16,000

$18,000

$20,000

$22,000

$24,000

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

What’s Happening at Work?Studies Show Workers with

Financial Problems:

Absenteeism Up Poor

Performance Ratings

Excessive Time—Personal Financial Issues

Productivity Down

Impact on Personal Wealth & Expenses

Floridians, Age 18-30, Seeking Credit Counseling in 2013

OAverage # of creditors: 4-8OAlmost 1,000 bankruptcy

filings O(-$32,000 net worth)OAverage FICO score: 526-571OPoor Credit Scores Lead to

Higher Interest Rates for Cars, Other Consumer Goods ($$).

What colleges and employers wish….

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 budgetO an understanding of what school

costsO a plan to pay using financial aid,

parent help, part time work