TL:DR Studies on financial education show it helps increase savings rates, but has virtually zero impact on whether someone will default on loans. The article suggests that financial discussions at home are important.
Really though, the article is raising discussion points and doesn’t really suggest what actions we should take (that I noticed, anyway).
According to this article, education influences saving but not debt.
Being educated can teach you what you should do, but if you’re in a low socioeconomic group it doesn’t magically give you enough money to do those things. You will still likely need a car and footwear (or a “grant” from Winz which is their word for a loan). Like the old truism says, being poor is expensive.
As for it being better to learn “at home” of course it is if the people at home know about that stuff but this comes across as a bit " let them eat cake."
I’m wondering if there’s an intergenerational thing here. Teaching people about money doesn’t help them avoid loan defaults, but does increase savings. Does growing up in a house where your parents are saving more, influence whether you need loans?
As in, even though financial education doesn’t reduce the chances of defaulting on loans, does it reduce the chances of their kids defaulting on loans?
Interesting question.
I guess the other variable is whether financial education about debt is simply not as comprehensive as education about savings and investment. Which might be a factor insofar as middle class knowledge needs around debt may not be as onerous (for example, needing to know how to structure a mortgage, vs needing to know how to convert a monthly predatory lending fee into a p/a percentage).