by David Safier
I'm starting with a bit of a rant, then I'll get to the main topic.
When young people go into debt, we're told it's because high schools didn't teach them the dangers of overspending on their credit cards or taking out loans they can't afford.
Except that it isn't true. When I was teaching high school, mandatory Personal Finance courses went in and out of fashion. When they were in, students were given lessons about debt. They went through simulations of real life situations. Students were paired as married couples and made to pay their bills and balance their checkbooks, and given surprise emergency situations they had to pay for. They were made to fill out real tax forms and pay pretend taxes.
Did it work? I think it was a valuable exercise, but buying things is more fun than staying within a budget, and it's so easy to spend when you can pay for the goodies at some indefinite time in the future. Give people the opportunity to spend without immediate consequences, and lots of them are going to do it. Don't say poor education is responsible for their excursions into debt — any more than you can say Oprah's recent weight gain is because she doesn't understand the problems connected with being overweight, and doesn't know about the ways you can lose some extra pounds.
And who are the biggest abusers of credit today? Bankers and big money investors and the trained economists who enabled them. Most of these have lots and lots of education, which includes detailed warnings about the risks of what they were doing. But the profits were there for the taking, so why worry about tomorrow?
Schools are a favorite whipping boy for businesses whenever they run into problems. We're lagging behind the rest of the world in manufacturing because schools didn't create an educated work force or teach them a good work ethic. Banks are dangling sugar-coated credit cards in front of people's noses to get them to buy themselves into debt, but the problem is that the schools didn't teach the students about the dangers of buying on credit. It's not the fault of us business people. Blame the teachers.
OK, rant over. Now to the actual topic of this post. We all know that credit card companies set up tables on freshman orientation days at colleges to convince students to sign up for their cards. They lure students into turning their first tastes of adulthood and independence into spending sprees for all the accoutrements of the good life.
But I didn't know that the colleges were not just giving the companies space to set up their tables. They were on the take.
Bank of America’s relationship with [Michigan State University] extends well beyond marketing at sports events. The bank has an $8.4 million, seven-year contract with Michigan State giving it access to students’ names and addresses and use of the university’s logo. The more students who take the banks’ credit cards, the more money the university gets. Under certain circumstances, Michigan State even stands to receive more money if students carry a balance on these cards.
Michigan State is just one example. This is as pervasive as universities getting kickbacks for steering students toward loans with certain companies, often ones that charge higher interest rates than others.
What the hell is wrong with these people? Yeah, I know, I know, money is tight and university budgets need whatever help they can get. But this is basically selling students souls into debt slavery so we can provide them with an education. Does anyone else see the contradiction here?
In a more moral universe, colleges and universities would tell the credit card companies, "No peddling on campus." And put up posters warning about the dangers of debt at a time when these new students, who are roughly analogous to country folks coming to the big city for the first time, are so vulnerable.
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“I would seriously doubt anyone (outside from Wall Street bankers) have been as maligned as government employees.” I think you’re right – but looking at the gross incompetence of government employees during the Bush years, one can see a mass amount of incompetence! Now, it is up to the incoming Obama administration to set standards of excellence in government employment to wipe out that situation!
I think the other whipping boy for many is public service. I would seriously doubt anyone (outside from Wall Street bankers) have been as maligned as government employees.
I remember hearing in the last 12 months a presentation by that guy who is the Rich Man Poor Man set of books author. He was on KAET in Phoenix and spoke of how public education is a failure. His reason was because kids are not educated about money.