Mr. President, the national unemployment rate hit a nine year high of 6.4 percent in June. We have lost more than 3.1 million private sector jobs since 2001, which is adversely impacting many of our recent college graduates who are finding it difficult to secure employment in a market that is not producing enough jobs. The Bureau of Labor Statistics has released findings that show for this same period that the unemployment rate for 20 to 24 year olds has risen from 7.2 percent to 10.7 percent.
The National Association of Colleges and Employers, which is a nonprofit association that provides resources to help career services and recruitment professionals, conducted a survey this past spring that found "corporate hiring has fallen by 36 percent since 2001; 42 percent of employers say they are cutting the number of college graduates they hire; and nearly 71 percent of government/nonprofit employers say they expect to hire fewer new college graduates this year." Mr. President, this information is very troubling to me because the state of our economy has restricted unemployment opportunities and exacerbated personal debt for young men and women graduating from college.
As our college graduates look to their future, many of them will already have accrued an excessive amount of debt ranging from student loans to credit cards. I have been working to shed light on this problem which is only getting worse, the problem of economic and personal financial illiteracy among our youth.
Accumulation of credit card debt by college students has become an issue nationwide. Credit cards are easy to get; many students are able to obtain a credit card by simply submitting a copy of their school identification card. They are acquiring and using credit cards at a greater rate than ever before, without completely understanding the credit system and accrued interest. Mr. President, many of these students are not adequately educated about using and paying off a credit card. Rather, many are being enticed by gimmicks to apply for a credit card. A quick Internet search can reveal dozens of sites that provide a myriad of opportunities for students to obtain a credit card. Some of these sites offer credit card limits of up to $5,000. Others suggest that one could use the card to purchase books, pizza, and tuition, and also earn bonus points for free music CDs. Other inducements are offered, such as a free movie ticket for those who have good credit.
Mr. President, with college students finding it harder to seek gainful employment upon graduating, one would hope that they would at least have a greater understanding of how to best manage their personal finances. It would have been beneficial for these graduates to have learned the essentials of money management and personal finance before leaving college, and even before leaving high school. However, we still have much to do in this area.
According to the 2002 National Jump$tart Survey, economic and financial literacy scores have declined since the Jump$tart Coalition for Personal Financial Literacy conducted its first survey of seniors in high school back in 1997. Of the high school seniors who took the survey, 68.1 percent of them failed, demonstrating a clear lack of understanding of the basic fundamentals of economics and personal financial management.
We have also seen an increase in personal bankruptcy filings and, if one were to couple that with the lack of jobs available for graduating students, we see that many of our students are well on the road to financial crisis, if they are not already there. Although the Department of Education has found that the default rate on student loans has decreased substantially, it has found that the dollars in default remain high. This means that students defaulting on their loans have a larger debt load, which may cause them to file for bankruptcy before they even begin a career.
Mr. President, in the 2002-2003 Fiscal Year, American lenders made about $31 billion in consolidated student loans, averaging about $27,000 each. Furthermore, 45 percent of college students are in credit card debt, with the average debt being $3,066. Mr. President, our students are accruing large amounts of debt without a clear understanding of how to manage their finances. As unemployment continues to rise and the job market remains bleak, we must empower our students with a greater understanding of economic and personal finance. Although improved financial literacy is not the complete solution to their problems, it can help them to alleviate or prevent some of the financial difficulties they may encounter.
As we continue to work towards economic recovery and job creation, it is imperative to also educate our children so that they may understand and excel in economic and personal finance.
