Why don’t schools teach personal finance? (Part 1)
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This is the first of many posts on this topic. Seriously, isn’t personal finance at least as important important as teaching post-modern analysis of Wuthering Heights?
PS–I don’t know what the last sentence means. English majors, please don’t write me.
Anyway, check out a letter my friend Ian Ybarra wrote to Student Financial Services at MIT.
I graduated (with a student loan) from MIT in June, 2004. And like all students with those credentials, I sat in an “exit interview,” which surely consisted of my receiving a folder of papers and watching a really bad instructional video about paying off student loans.
Recently, I revisited that folder of student loan documentation. In addition to the papers stating the principal, interest, and repayment terms of my loan, there was your business card (how I knew to contact you) and a paper with the headings “The Danger of Credit Cards, 10 Facts Students Need to Know.” Below those headings were, as promised, 10 facts students need to know — 10 terribly scary facts students need to know about very basic matters of personal finance, like…
#1 “Debt problems can lead to depression, which affects study habits, academic performance and retention rates.”
#2 “Unfortunately, in a few extreme cases, the stress associated with credit card debt has been a factor in student suicides.”
#4 “Some studies suggest that those students with credit card balances in excess of $1000 drink more, smoke more, use more prescriptions for
depression and have lower grade point averages than those who don’t carry credit card debt.”
#6 “Colleges and universities are the one group that makes money out of the credit card industry without bearing any responsibility for educating the students about the possible pitfalls and the devastating effect bad credit can have on their financial future. In return for lucrative fees, many colleges allow the banks and credit card companies to hawk their cards right on campus.”
(Read all 10 at
Great information. Definitely good to know…4 years earlier, don’t you think?
Fortunately, I didn’t leave school with credit card debt, my GPA was solid, I didn’t kill myself, and I didn’t develop substance abuse problems. But what about the kids who weren’t so fortunate?
Why were they not given this information when they entered MIT rather than when they left? Why are MIT students not exposed to the basics of personal finance — like those covered by Ramit Sethi’s seminars
http://seminars.iwillteachyoutoberich.com/ — as part of their “entrance interviews,” rather than being notified of what could have happened to them over the past four years as part of their “exit interviews”?
For as intelligent as MIT students are, I meet far too many new MIT graduates who have crazy credit card debt or don’t even have credit cards in their own names or wonder what kind of music comes on MITFCU’s CDs…the list goes on.
This seems broken. I hope that the people in your office are working to fix it.
If you have ideas for how to fix this at your school, please send an email or add a comment.
Also check out Ian Ybarra’s blog, one of the best I read about discovering what you really want to do.
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