As a macro-economic problem, those of us saddled with this debt are unable to
fully participate in the economy. 93
Stories such as these characterize the situation a number of people face after graduating
from college, when they are left to confront the consequences of their earliest financial
decisions. 94 College students may buy their first car, rent their first apartment, and make a
number of other financial investments to prepare for their future before they have had much
exposure to financial education either through the school system or through personal experience.
All of these decisions will have long-term implications for a student’s success upon completion of
his or her education. 95 Beyond the limiting effect of poorly informed choices on a young person’s
credit and future financial success, many employers now examine an applicant’s credit when
considering whether to offer employment. 96 Thus, not only might the financially illiterate
struggle to support themselves adequately throughout their lives to truly achieve the American
Dream, but they may also lose out on employment opportunities that could ensure a stable
income. 97 That is a grim future for anybody to face, much less a young person faced with the
ramifications of his or her earliest financial decisions. Young Americans that fall into one of the
marginalized groups within American society face additional obstacles. They are hampered by
trans-generational debt and lack exposure to the modeling of sound financial decision making due
to their parents own struggles to bridge the economic divide.
II. FINANCIAL ILLITERACY BREEDS ECONOMIC INSTABILITY
“It is incumbent upon each of us to improve spending and savings practices to ensure our own
individual financial security and preserve the collective economic well-being of our great
93 Woodruff, supra note 91.
94 Id.; CUNNINGHAM & KIENZL, supra note 87. One consequence of early financial decisions may be credit card debt; college students
are frequently targeted by credit card companies seeking to acquire new consumers. See Michelle Singletary, Despite New Card Law,
Credit Card Companies Still Targeting Young Adults, WASH. POST (Jan. 12, 2011), http://www.washingtonpost.com/wp-
dyn/content/article/2011/01/12/ AR2011011205565.html (“Jim Hawkins, a professor at the University of Houston Law Center, found
that 76 percent of the 300 undergraduates participating in a survey he conducted had received a preapproved credit card offer last
year.”); see also Harnisch, supra note 28, at 13 (“The median [credit card] debt for freshman students tripled from 2004, and the
average senior had a balance of over $4,000. The average amount charged for school-related expenses, according to the survey,
doubled since 2004.”). This Article does not attempt to offer an opinion on these practices; that is beyond the scope of this discussion.
The purpose of this Article is to illustrate the financial decisions teens and young adults face be they good, bad, predatory, or
95 See Harnisch, supra note 28, at 13-15 (discussing the financial challenges students face during and after college); see also
CUNNINGHAM & KIENZL, supra note 87, at 26-28 (explaining the identifying characteristics of a student that is more likely to repay his
student loan debt).
96 Daniel Bortz, How to Convince a Prospective Employer to Overlook Poor Credit, U.S. NEWS (Dec. 14, 2012),
Despite a slowly strengthening economy, job seekers have plenty to worry about these days. Stiff competition
and fewer available jobs are holding many Americans back from joining the labor force. Unfortunately, job
seekers with poor credit have yet another thing working against them.
An estimated 47 percent of U.S. employers conduct credit background checks on job candidates, according to a
2012 survey by the Society for Human Resource Management (SHRM). That’s down from the 60 percent who
conducted credit checks in 2010. Red flags differ among employers but could include late payments, maxed
credit cards, or other financial black marks that indicate a lack of responsibility in a hiring manager’s eyes.
98 Ron Lewis, Finance Quotes, BRAINY QUOTE, http://www.brainyquote.com/quotes/topics/topic_finance3.html (last visited Nov. 11,