TD Bank Group a global organization, funded research team, has warned that the credit card debt among college going students in America has distended at a rate faster than that of inflation. With no proper training in household arithmetic, personal finance and budgeting, there is a generation of young graduates who may have to face limited best insurance access, mortgage as well as credit card deals. It will take some time and the job market will recover, but young American`s credit will remain a threat.
Chris Jones, James Marple and Craig Alexander, the group`s economists reviewed the statistics available from Federal Reserve Bank of Cleveland, Sallie Mae and the U.S. Department of Education for the report. It is available free on the website of the TD Bank Group. With the altering relationships between employees and the employers, it is required for most American workforce to save for retirement, rather than depend on any clear benefit pension plans. The report makers found evidence that the majority of students are just able to manage their present expenditure and do not have the means to think about saving for retirement.
It is suggested by the authors of the study that a lack of responsibility leads youngsters to fall deep into debt. They have little knowledge of how defaulted student loans and credit cards can affect their life choices in future. Rather than making some sacrifices and cutting down costs while in school, a large number of college students in America have balances on four to five credit cards. Data from Sallie Mae hints that many families in America don’t talk about finances at home. This leaves students without a strong foundation to enable them to take correct financial decisions.
It has been pointed out by the report that bank branches as well as other financial institutions in the neighborhood can be significant players in enlightening young clients. Financial guides and bankers can inculcate stronger reasoning and math skills in the life style of the very young Americans. According to the authors it will be a productive move to introduce formal financial programs, personally mentored by banking professionals in middle and high school. This will make money management less daunting for the younger generation.