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Cierra commented on Improving Financial Literacy to Empower Students

Thanks for the links! I'll have to check those out.

I agree with your point about the value of money being abstract unless you've worked for it. I've seen this happen with someone close to me who had student loans. Even though this person had worked before college, they had not needed to purchase food and support themself. So even though they had worked a little, the concept was still abstract because there wasn't a strong commodity-value available for comparasim. Before this point, money was not needed for large purchases like rent, food, and healthcare. It was only for occasional purchases.

I will add that in addition to money being an abstract concept, the percieved value can fluxuate. I've always felt that my concept of the value of money is skewed based on the fact that when I started helping out as a babysitter, I was paid only $2 an hour. Until I became an adult and started working 'real' jobs, my concept of how much something cost was very skewed based on how little I made related to how much time-effort I put in.

Now, as a professional, I notice my own concept of how much something costs varies depending on how much income I am making. For instance, if I take on a large freelance project that pays well, everything I normally need to purchase feels less expensive. If, on the other hand, I've made comparatively little recently, everything feels expensive.

That could tie into college cost in that a student might be willing to take out more loans than they will be able to afford if they don't have an acurate value of money compared to their ability to pay when due.


UPDATE: Checked out those links--awesome campaign!

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Cierra commented on Improving Financial Literacy to Empower Students

This is so true. I was just having a discussion about student loans with someone who went to college several decades ago. He stated that students with loans all "signed the paper" so they know what they are getting into. Although there is still responsibility of choice involved in choosing to accept loans, many loans now simply show up in a "student portal" on the school website. The loans are treated just like non-loan financial aid. There's no effort to educate students about the total cost of the loan over time, no graphics on the website and certainly no paper pamphlets showing how much the total interest will be over time.

I hypothesize that--in addition to having little other financial choice--many students become deeply indebted due to the fact that the money is so theoretical--when the loan amount is just a small number to be glanced at on a computer screen, it is hard to feel that it is even real.

Think about this: If you spend $100 on groceries and pay with a debit or credit card, does it seem like a lot of money? Now imagine you paid in one-dollar bills. I guarantee that you will have a greater sense of how much money you are spending.

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Cierra commented on Is a college degree worth it?

What if a student is not going to college because they want a job? What if they are going because they want to learn? Then it's not about a salary they might make after, but the intrinsic worth of the education they gain.