July 24, 2009
Cash-strapped families taking out large student loans to pay tuition. College students graduating with thousands of dollars in debts. Stressed-out seniors working double-shifts to pay off loans. These aren't new stories, but they're becoming increasingly common at universities as the financial crisis drags on. With experts blaming students' financial woes on risky loans and a lack of understanding of key money concepts, financial illiteracy in America is getting serious attention from universities around the country.
That's because of stories as depressingly familiar as this one: Texas Tech senior Nelson Gonzales, who didn't have much money growing up in south Houston, got a credit card after coming to college. The piece of plastic opened up a new world to him. "Though I had a meal plan, I was still getting fast food, going out every day, trying to live a lifestyle I couldn't afford," Gonzales says.
Then it caught up to him. After living sometimes on one meal a day and amassing $4000 in debt, Gonzales came to Red to Black, Texas Tech University's free financial counseling clinic, where he received peer counseling and learned how to create a budget.