Congress would create a comprehensive financial education site for student borrowers under a House bill submitted Friday by Rep. Teresa Leger Fernández, D-N.M.
The Financial Fitness Act, which is co-sponsored by Rep. Victoria Spartz, R-Ind., would provide resources on “core personal finance concepts such as budgeting, saving and investing” in addition to education on “managing student loan repayment including benefits, policies and forgiveness,” an announcement from Leger Fernández’s office stated.
The need for the program is shown by the immense debt and budgeting needs of low-income and minority students and the fact that personal finance is not “a core part of a student's basic education,” the representative said in the announcement.
Financial education resources would benefit students before they opt to take on loans for higher education, Spartz said in a statement.
“Nearly 43 million people owe an average of $36,406 in federal student loans, and student loan debt in the United States totals $1.73 trillion, growing six times faster than the nation’s economy,” a preamble to the bill read. “Student debt has significant racial equity implications. Almost half of Black college students are using federal student loans to cover educational costs, and Black college graduates are still substantially more likely than white college graduates to default on their debt within four years of graduation.”
In addition, the need for more financial literacy is evident given the higher risk of loan default among veterans, parents, and low-income and first-generation college students, according to the bill.
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