All Posts Tagged With: "credit cards"
Students don’t know money
Financial literacy a serious gap in modern education
Students at Concordia University who want to spend some time in their university library have to say no to a credit card on the way in, then again on their way out, every time they visit the building.
“It’s right in front of the stairs to go up into the library,” Concordia student Brandi Goulding told the McGill Daily last week. “So if you are choosing to study in Concordia’s library, you have to say no or listen to their spiel every time you walk by.”
Credit cards available to anyone who asks for them is a relatively new phenomenon, and that means that the education systems haven’t caught up with the modern reality. And it’s time they did.
Consumer debt in Canada is now over $41,000 per person. That’s more than 2.5 times what it was 20 years ago, according to a report by the Certified General Accountants Association of Canada.
What’s even more surprising is that report also found that Canadians are ready to take on even more debt if it means maintaining their preferred lifestyle. What is lacking, though, is an understanding of what debt means, what interest rates mean and what credit ratings mean.
As people are being targeted at ever-younger ages for credit cards, debt is accumulating before people even have their first jobs or any means of bringing their finances back into the black.
Partially because of this increase in debt levels, and largely because people hate being deep in debt, there is a growing movement to teach personal financial strategies as part of a standard high school or university curriculum.
It’s time that movement came out of the back room and became reality.
Financial literacy is increasingly important to being successful in the modern world. And until we teach it along with basic arithmetic, reading Shakespeare and playing dodgeball, we are failing our youngest students.
Canada Student Loan debt tops $13 billion
Figure doesn’t include about $5 billion in provincial or personal debt
Federation of Students news release:
Canada Student Loan debt will surpass the $13 billion mark today for the first time in the nation’s history. Total student loans owed to the Government of Canada increases by $1.2 million a day. The $13 billion figure does not include approximately $5 billion in provincial student loan debt or personal debt such as credit cards, lines of credits, bank loans, and family loans. This school year alone, almost 360,000 students required loans from the federal government.
Universities make big bucks on student credit cards
Bank of America pays $8.4m for Michigan State students’ names and addresses
One wonders about the extent to which Canadian post-secondary institutions have these types of arrangements with credit card providers:
Bank of America’s relationship with the university extends well beyond marketing at sports events. The bank has an $8.4 million, seven-year contract with Michigan State giving it access to students’ names and addresses and use of the university’s logo. The more students who take the banks’ credit cards, the more money the university gets. Under certain circumstances, Michigan State even stands to receive more money if students carry a balance on these cards.
Hundreds of colleges have contracts with lenders. But at a time of rising concern about student debt — and overall consumer debt — the arrangements have sounded alarm bells, and some student groups are starting to push back.
The relationships are reminiscent of those uncovered two years ago between student loan companies and universities. In those, some lenders offered universities an incentive to steer potential borrowers their way.
