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Business of Giving: Help Fight Financial Illiteracy


Helping young people start their adult lives on more equal footing.


I got a phone call recently from a young woman whom we consider a success story here at The Children's Aid Society. She grew up in a very poor family, but studied hard and was accepted to one of the country's leading liberal arts colleges.

"You were right," she said to me. "All this hard work is finally paying off. I'm now worth $10,000."

A young woman, still in college, without full-time employment, from a hardscrabble family in one of New York City's most economically challenged neighborhoods, had amassed a nest egg? How could this be? I thought. Her answer made me groan.

"I have 7 credit cards," she said. "One is worth $1,500, and one is worth $1,000…"

I don't know what part of this story frustrates me more. The fact that this intelligent young woman allowed herself to be sucked into the vortex of credit-card debt, or that these companies preyed on her and her classmates. Oh, and let's not forget the college, which sold the students' contact info to the credit-card companies in the first place.

We can blame others for all of those factors, or we can examine the root of this problem: young people's financial illiteracy. This student, just a couple years away from entering the real world of paychecks, rent expense and utility bills, didn't understand that credit cards are not free money. I'm grateful that she called me, because I was able to engage her in a dialogue about banking and lending, and stop her from running up a high interest balance. But how many students are graduating from colleges and universities this month burdened with credit-card debt? Too many, as shown by a recent survey by Sallie Mae.

The numbers truly blew me away. Consider:

  • Eighty-four percent of college undergraduates have at least one credit card, and half of them have 4 cards or more.

  • Seniors are graduating with an average balance of $4,100, a 95% increase over the average debt held 5 years ago.
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