The increasing rates of tuition and living expenses in California are making it difficult for CSUSB students to have financial control.
The journey to financial freedom for most college students begins with a detour of student loan debt. According to Experian, forty-four million students today are in debt due to student loans, which is about 70% of all college graduates, averaging to about 1.7 trillion in student debt. Since 2017, 81% of students attending CSUSB are first-generation students and 58% of undergraduates are low-income students who receive financial aid, according to the CSUSB facts and statistics web page.
Financial literacy is typically taught by parents, guardians, or mentors. A majority of students are not being taught about financial literacy, savings, and money management. Jorge Hernandez, a business major at CSUSB claimed, “Growing up, my parents never really talked to me about money. It was almost frowned upon to bring the topic up at home.”
Hernandez’s parents never spoke about savings or investing. Hernandez shared, “Growing up poor made my parents stress out so much about money for all the wrong reasons. It was always about not having enough and living paycheck to paycheck. Saving and investing was looked at as something only the rich does.”
When it comes to savings and investing there are typically two methods to choose from. A 401k is the traditional retirement plan in which money is put into this account and is not taxed until the money is withdrawn from the account. A Roth IRA is another type of savings account. However, the money on this account is not taxed and you can only contribute up to $6,000 a year. Hernandez said, “I know a little about 401k because they take money from me every paycheck but nothing about Roth IRA.”
Hernandez also shared that he has student debt. “It sucks that I had to take loans out, but I did not qualify for financial aid, and I wanted to get a degree so that someday I can be financially stable.” Many students attending CSUSB can relate to Hernandez because they also come from low-income families and have little to no information about finances.
Mayra Garcia, a biology major at CSUSB, said, “My parents hardly mentioned it, and it sucks that the school system does not offer any courses on finance until you attend college. I feel like by that point it could already be too late.”
Garcia further exclaimed, “Colleges expect 17-18 years olds to decide to go into debt for school and it does not seem fair at all, since most people around that age do not even know what they want to eat.”
Managing money and being financially literate seems to be a common theme with each student, yet most students do not have enough information on how to get started or how it works.
Rene Alvarez, a communications major, claimed that their parents only talk to them about finances on a surface level. “I feel like for most people, parents are viewed just as a provider, not really someone you can ask for financial guidance,” said Alvarez. “One of the biggest questions I have when talking about money management is how to buy a house. This process seems super stressful and I have no clue how or where to even begin. It is something that I want to learn just so that I will be better prepared when the time comes.”
The campus will be holding a Paying Back Your Student Loans event on December 2, 2020.