What percentage of your income should be set aside for savings and retirement?
What is the difference between a variable interest rate and a fixed interest rate?
How much do you need as a down payment to purchase a home or vehicle?
These are all questions that I think students in Maine should be able to answer by the time they graduate from high school, which is why I support adding instruction in personal finance to the Statewide System of Learning Results.
Hi, I’m Matt Pouliot. I represent District 15 in the Maine Senate, which includes Augusta, China, Oakland, Sidney and Vassalboro.
Before students graduate from high school, they make a series of important financial decisions that can either set them up for success or strap them with a level of debt that can potentially delay important life milestones such as purchasing a home, starting a family or even retirement.
That’s why it is so important to ensure that teenagers are equipped with the tools they need as they decide where to attend higher education, if they opt to go that route, and how they will pay to make their dreams a reality.
It is arguably more important now than ever to ensure that all students have the information and skills needed to make their way into adulthood and earn their status as financially-independent citizens.
As a nation, we are in the midst of a student loan debt crisis. According to Forbes, student loan debt is now the second-highest consumer debt category, surpassed only by mortgage debt.
College and university attendance has steadily increased for several decades as young Americans hit the books to meet our economy’s demand for a skilled labor market. Last fall alone, 19.9 million Americans attended post-secondary school, up from 15.3 million in the year 2000.
Along with the increase in attendance, there has been a correlating increase in student debt. According to CNBC, 70 percent of college students graduate with a significant amount of student loans, with the average borrower owing $37,172 at the end of their college career. This represents an increase of $20,000 over the last 13 years alone.
$37,000 is a serious amount of debt that equates to roughly $393 payments per month, with the lifetime of some student loans lasting for 20 years. It is safe to say that many student loan borrowers struggle to keep up with their payments, as one-in-10 of them default on their loans, meaning payments are more than 90 days late.
While taking on student debt may be viewed as a worthy investment for many, it is important that students understand the weight of their decisions (whether to attend an in-state school or not, what field of study to select and how much time they will take to complete their degree) before they sign on the dotted line.
A criticism that I have heard from some is that financial literacy should be taught in the home, and I couldn’t agree more. But I know that in today’s day and age, I would rather err on caution when it comes to teaching our students about financial literacy and debt.
That’s why members of the Education and Cultural Affairs Committee, including myself, have supported legislation to add personal finance specifically to Maine’s system of learning results. This will set the expectation that Maine high schools incorporate personal finance into their lessons without dictating curriculum to local school districts.
This change simply puts personal finance front and center as a standard to make it clear that Maine prioritizes personal finance; our future generations deserve nothing less.
Thank you for listening. Again, I’m Matt Pouliot, the State Senator from District 15.