Thank you, Mr. Chairman. I appreciate your conducting this hearing today and all of your efforts to have financial literacy be such an important focus of the Banking Committee.
Many college students are not adequately prepared to make informed financial decisions in situations that they will face during and after college. Students often have to borrow heavily to help finance their education and have limited means provided by part-time jobs. While experiencing these financial difficulties, they are also provided with countless opportunities to easily obtain credit cards. Thus, credit card debt can quickly add up for the students who do not know how to responsibly use credit.
This lack of knowledge often leads to a large debt burden for students that further complicate their future financial situations. Many students may not realize the importance of keeping their own credit clean so as to not preclude future financial opportunities. For recent graduates, debt burdens and poor credit histories can make it even more difficult as they start out on their own and attempt to buy a car, rent an apartment, or purchase their first home.
College students who make uninformed financial decisions are also likely to continue to make the same mistakes as they get older. They may not fully understand the power of, for example, compound interest and may fail to save and invest sufficiently for retirement.
Today, this Committee must examine the actions necessary to help ensure that college students are able make informed financial decisions during and after college. Financial literacy among all Americans, not just college students, needs improvement. I look forward to working with my colleagues in developing comprehensive approaches to increase financial literacy among citizens.
I thank the witnesses for appearing today and I look forward to your testimony. Again, thank you, Mr. Chairman.