President’s adviser gives advice on managing money
April 19, 2011
By Alex Ruf
College students have a lot to balance. Students have to keep track of their classes, their jobs, extracurricular activities and their personal finances. Elizabeth Warren, special adviser for the Consumer Financial Protection Bureau, is trying to make debt easier to understand.
On Monday, Warren gave the annual Chellgren lecture titled “Debt, Credit and the Middle Class” to a crowed Memorial Hall. She spoke on how the world, especially for the middle class, has changed since the previous generation.
Warren serves as assistant to the president and special adviser to the secretary of the treasury on the Consumer Financial Protection Bureau. She is the author of nine books, two of which made it on the bestsellers list, and has been mentioned as one of Time magazine’s 100 most influential people in the world in both 2009 and 2010.
Warren began her speech with a series of slides showing the amount the average American man makes over time, and then compared it to an average couple. Both cases saw increases until the 1970s, when the average wage for a single man leveled out. In 2005, the average single man made less than he would have in the ’70s.
“In one generation the economics of the middle class shifted,” Warren said.
Not just the amount of money people make has changed since the ’70s but also the amount of money Americans save. Americans have been saving less and less since the 1970s, Warren said. Recently, Americans are saving their money more, but that is because people begin to save more in times of economic recession.
“As saving goes down, debt goes up,” Warren said.
Student loans are quickly becoming the largest form of personal debt in America. Oftentimes college students are susceptible to falling in the risk of massive debt by the time college is over. Most of it comes from trying to pay for school, but the rest comes from credit card debt.
Credit card debt is on the rise with college students. Many students do not read the fine print on the contracts they sign with credit card companies. This lack of reading leads to problems, such as a massive increase in interest rates.
Warren is an adviser for the Consumer Advisory Board. She works to try to relieve some Americans from debt. Warren’s goal is to make mortgages and credit card contracts easier to understand for the average American. She wants to get out of fine line mentality that most contracts seem to be stuck on.
“This will give us the chance to fill the hole in the bottom of the boat for the middle class,” she said.