High school students report shockingly low levels of readiness to take on potential near-term financial tasks like understanding how to pay for college or the implications of taking out these loans.

Opening Bell

Most Incoming College Students Don't Understand the Financial Impact of Student Loans

for more on this. Ray Martinez, co founder and president of Ever fi a platform which is emphasizing financial education for students joining us now. Thank you so much for being here. I want to start with Murphy's recent survey found that high school students report shockingly low levels of readiness to take on potential near term financial tasks like understanding how to pay for college or the implications of taking out these loans. How concerning is that lack of financial education among students? Well Asia, you're, you're exactly right. And you know, I'd say two things. Number one is that there's been a tremendous amount of progress made over the last decade as it relates to financial literacy and financial education for students. Uh Number one, you have more online tools and resources that are available for young people and teachers. And then number two, the academic research is demonstrating that when students are exposed to experiences around budgeting, understanding student loans, how your credit score works, they are making significant progress as it relates to knowledge and understanding and preparedness. But what is most concerning is that the financial services system is moving So fast. Student loan debt, peer to peer payment systems buy now pay later. And what we think is missing in the education system today. Um is this instruction around personal finance and financial literacy. It's why over the last 15 years we've worked with about 25,000 public schools across the United States Puerto rico and Canada to fill this missing learning layer in education. We think it's critical for young people to have this information, not just in high school or in college or when you enter the workforce, but much earlier starting in elementary school middle school and high school understanding your finances as you know, Asia is a lifelong journey. You never completely master it. And I think before students are making these really critical decisions about college and really making the most important financial decision of their life. They need to understand the different pathways and options that are available to them. Yeah, and I kind of want to rewind for just a moment and talk about student loans, specifically how big of an impact can that have on someone's financial journey. As you mentioned, it should start um in middle school moving through high school and to college when you make that big decision, but how integral are these particular products? Well, it's, it's critical, you know, just in the last two weeks we've been in classrooms all across the country, we were in a classroom in Denver yesterday in Miami and in san juan Puerto rico and when you talk to students, they want to understand and learn about money. And I'd say there are two topic areas that come up in all of our conversations with high school juniors and seniors Number one there asking about student loans and they're asking about career pathways in number two, their asking about Cryptocurrency and how crypto works, but as it relates to student loans. Um this is a really important financial decision that a student and a family is going to make and if you take out this debt and you don't graduate, there can be very severe consequences. That's why when we talk to students, there are different pathways. You can enter the workforce, go to a two year university, go to a four year university, start your own business. There's a lot of interest in being an entrepreneur going directly to the workforce or military service, but there's lots of different options and I think making sure students understand these options before they take out a lot of debt. That's really interesting to hear what you're starting to get feedback on from these high school students. I wonder just to that point, you mentioned things like an interest in Cryptocurrency and also taking on student loans in addition to having entrepreneurial aspirations. Are there any other trends that you're seeing with this next generation that makes you particularly hopeful when it comes to financial literacy? Well, you know, it's just um you know, in front of a few 100 students the other day and you know, one of the things that we have learned is that there's just so much talent in the public schools in the United States. I mean we have a generation of students that are technically, you know, very savvy with technology have a lot of information at their finger tips in there. You know, they're very interested in these pocketbook issues, they really want to understand how many works. They're also very interested when you get them in these small groups, really understanding about careers and financial services. I think oftentimes these careers seem out of reach, but if you work at a credit union or a bank or insurance company, there's lots of interesting things that you can do. So that is another trend that we're seeing ASia as we're talking to two students. Do you think there's something that should be done on the federal or state level right now to prioritize financial education uh, for students? Um Yes, there's been a lot of progress that's been made when we started the business back in 2008, you had two states that required personal finance in order to graduate Utah and Tennessee, You now have 12 states with Florida just recently passing their mandate for high school students. So it's the largest state in the country to require personal finance instruction. There are 56 other pieces of state legislation that's looking at having some type of semester long or yearlong requirement around personal finance. I think what we don't want to create is an unfunded mandate and it's where our technology really fills the gap. All of our software programs that are available in english and spanish and in french if you're in Canada are free to teachers in public schools all across the United States. Um, so I think more can be done at the state level and the secretary of Education is a huge um you know, proponent of personal finance instruction for for students, we can do this asia. I mean, we can make sure that every student, every family, regardless of zip code, regardless of where you live, has access to this information and it's relevant. It's timely and it's engaging and you know, the most important thing I can say on, you know, on on this call and we're talking to you. Students want this information and I think we can equip students and teachers with the right tools with technology if we do have students or even guardians watching right now who are at that point in school where they're considering their student loan applications heading to college and they don't have ever if I access in their school, what would you suggest to them? Um But the number I have two suggestions. Number one, as I would talk to your guidance counselor at school, and then number two, um I would talk to a financial professional. Um you know, we work with about 1000 financial institutions across the country and when you talk to C. E. O. S and you talk to members of these organizations, they want to help people make good decisions and I think it's okay to ask for help, particularly when you're you're making a really important investment. So I'd seek out some financial advice from your local financial institution. All right, Ray Martinez, co founder and president of Everybody. Thank you so much for a lot of good information there.