A new report out from the Treasury Department paints a grim picture for people currently or entering college.
A large contingent of graduating high school students are financially illiterate, with roughly one-in-five lacking even a "baseline understanding of financial proficiency," the report found. As colleges continue to raise costs and students continue to incur more debt, the Treasury Department is trying to tackle both - in part, with new guidelines suggesting that all college-accepted students be required to take a financial literacy course.
A report released by the Financial Literacy and Education Commission, a joint effort by the Treasury Department and the Department of education, outlines ways to help students better prepare for the future and raise the financial literacy level of college-age students, including mandatory financial literacy classes and greater transparency when it comes to the cost of higher education. These steps, the department says, will help students realize how much debt they are actually taking on, as well as understanding and planning their life outside of college.
The report also calls for the expansion of financial courses in high schools, explaining that "only 28 percent of undergraduates surveyed in the 2015–16 National Postsecondary Student Aid Study could answer three core financial literacy questions correctly."
The report also suggests more transparency when it comes to colleges and what they charge, suggesting colleges clearly itemize their tuition costs as well as require debt letters each year, which would show the student how much interest they added to their debt over the year.