Page 29 - Payne Research Center ~ Money Matters

P A Y N E C E N T E R . OR G
Insight
The Financial Well-Being course module, Credit, Debt, and You, provides a solid foundation in credit cards, emphasizing that students do not have to go into debt to build good credit. However, we can further strengthen students’ understanding and skills by enriching these topics with more engaging activities and real-world scenarios. Incorporating hands-on exercises, interactive tools, and resources can bring these concepts to life and empower students to make informed financial choices. Examples include developing personalized repayment plans, calculating the long-term costs of minimum credit card payments, and vividly illustrating the dangers of high-cost predatory loans. These enhancements can help students better understand healthy credit usage and equip them with the skills to navigate its complexities and borrow with greater confidence.
To enhance the effectiveness of the Financial Well-Being course module on credit and debt, it is crucial to move beyond theoretical concepts and provide students with practical, hands-on learning experiences. Incorporating real-world scenarios and interactive tools can help students to apply their knowledge in a meaningful way and develop the skills they need to make sound financial decisions. For example, students could participate in simulations that allow them to experience the consequences of different credit card repayment strategies or use online calculators to estimate the long-term costs of carrying credit card debt.
Furthermore, the module could be expanded to include a more in-depth discussion of the risks associated with high-cost predatory loans, such as payday loans and title loans. By vividly illustrating the potential dangers of these financial products, students can be empowered to avoid them and seek out safer, more affordable alternatives. This could involve analyzing case studies of individuals who have been trapped in cycles of debt due to predatory lending practices or inviting guest speakers from consumer protection agencies, community development financial institutions (CDFIs), credit counseling services, or successful entrepreneurs who have navigated financial challenges and built wealth responsiblyto share their expertise.
Future research could explore the broader issue of total student indebtedness, including the combined impact of credit card debt, student loans, and other forms of borrowing. This research could examine the interconnectedness of various debt types and analyze how the cumulative long-term impact of indebtedness can influence students’ financial well-being and life choices.
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