Using Financial Education to Improve the Foreclosure Situation in America

Foreclosures have been rising in our country since long before the economic downturn we now face. According to Enterprise Community Partners Inc., a non-profit devoted towards creating opportunities for low-income families to achieve homeownership, “The rate of personal bankruptcy in the United States rose by 69 percent from 1990 to 2000. ” Foreclosures are not something that Americans can properly navigate without knowledge. Studies show that it is without this knowledge that many individuals find themselves in dire economic conditions. In order for our country to develop a more successful approach towards finances and overcome the foreclosure crisis we are now in, I firmly assert that our people need a more functional financial education.

There is a serious deficit of financial knowledge in our nation. The Credit Union National Association, in a written statement to the Senate Committee on Banking, Housing, and Urban Affairs in 2002 proclaimed that “there is considerable evidence that financial illiteracy has reached record proportions, and its impact has contributed significantly to rising levels of bankruptcy and to lowering the standard of living in general for many American families. ” Indeed, 43% of adults with the lowest level of financial literacy live in poverty. A mere 4% of adults with the highest level of financial literacy are in the same situation . In 2006, USA Today reported that high school seniors being tested in a 30-question financial survey answered on average 52.4% correctly . The last time that I checked, that percentage is failing.

And our country is doing just that to its people, failing to educate them on how to navigate through the terms and details of home mortgages and finances. As vital as math ...

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...they prove they have taken a driving education course. Adults should receive some sort of tax break or credit adjustment if they graduate from financial literacy courses. For those who currently receive assistance from the government, courses in finances and money manners should be mandated. This would provide some our nation’s most vulnerable people with resources for helping themselves and their communities.

In time, the economic situation that the United States now finds itself in will improve and stabilize, home values will begin rising again, and our nation will heave a collective sigh of relief as the foreclosure crisis comes to an end. At this point and before it, however, we must properly address our crisis of ignorance and begin educating our people. It is only then that we can become truly successful and put an educated stop to foreclosures in our nation.