Student Debt - Breaking the cycle by Investing by Timothy

Student Debt - Breaking the cycle by Investing by Timothy - July 2018 Scholarship Essay

If I was running for student body president I would positively impact my school by helping students and staff introduce real life financial education.

Often new students are away from home for the first time in their lives and they have not been financially educated on debt or investing. This lack of education may be due to their parents not being financially educated and not being able to break the endless cycle of poverty.
I would work on developing a program as well as curriculum to help students and parents work on a meaningful budget and becoming aware of the dangers of long term financial debt. The course would provide real life scenarios on how students become trapped in financial debt and ways to minimize the debt load. I believe students are using their loans as a quick ATM and fail to realize the consequences of their actions. Student debt can be as large as a mortgage and follow the student their entire lives. This type of financial burden creates financial stress and forces the student to take jobs that he or she may not normally take due to the ever-mounting debt load. Financial training and education could possibly limit the burden not only on students and their parents, but society as a whole.

I would also implement financial education that goes well beyond the motto of “set and forget” when it comes to investing. Often financial experts recommend this method due to their own personal interest in the students and parents money. These so-called experts create a world where the student feels powerless over money instead of teaching them how to use money as a tool. Curriculum would be developed to help students learn how to make passive income in the stock market as well as real estate investing. Training would also be given in entrepreneurship. Often times college professors are teaching business and finance courses, even though they have yet to successfully run a business. Although theory of business and finance sets a foundation for students it doesn’t address the issue of empowering students to become financially secure.

Courses would be given in the stock market by leading professionals in the industry. Real estate investors and brokers would also be brought in to teach students how to generate passive income. Although this idea may seem controversial at first, I believe that if students have a passion for generating income they will in turn try to save money thus reducing debt. With a spend first, pay later credit card approach attitude we teach our students that they can live in the now and not have to focus on how their decisions will affect them later in life.

In this short essay I stated that I believe students should become financially educated and steps I would take to give them exposure to professionals who have ran businesses and have been successful in investing. College should be a place where the student will feel empowered after graduation and not have to wonder why he or she is in so much debt and doesn’t have a clue about finances.
Although this short essay may be controversial it does point to a problem we as Americans are facing and will continue to face. A recent article published on July 11, 2018 by the New York Times titled “The New Toll of American Student Debt in 3 Charts” mentions the student debt load is about $1.4 trillion and millions of people are in default. Clearly this is a continuing problem and will continue to be a problem unless we break this cycle with a financial education.

Thank you for reading my essay and allowing me to bring this issue to the forefront of colleges.

Timothy Ortiz