Children from low-income households and communities of color are less likely to have access to financial education.
NextGen’s 2021 State of Financial Education Report found that in schools where 75% or more of the student population are either minorities or eligible for free or reduced lunches, less than 8% were guaranteed to take a standalone personal financial course prior to graduation.
According to the NFCC’s 2019 Consumer Financial Literacy Survey, barriers to homeownership may be in part the direct result of financial illiteracy, including poor or no credit history and a lack of understanding on homebuying basics.
Given their position in the community, banks can play a critical role in bridging the knowledge gap by promoting financial education.
Homeownership has long been the foundation on which Americans ascend the economic ladder, as it creates wealth accumulation in the form of equity and provides greater access to credit.
While there are challenges with housing supply, creating a more financially literate society will produce opportunities for more Americans to access the benefits of ownership.
Data shows financially educated consumers are more likely to experience better long-term housing outcomes.
A 2017 study indicates borrowers who received pre-purchase homebuyer counseling meeting HUD standards were 42% less likely to experience foreclosure.
