Bankruptcy education offers little benefit, study says
There may be significant flaws with the federally-mandated financial education courses, that are required for bankruptcy filers, a new study says.
There may be significant flaws with the federally-mandated financial education courses, that are required for bankruptcy filers, a new study says.
The study, surveyed 2,000 bankruptcy filers in February and March of 2007, and found that only 33 percent said the courses would have helped them avoid bankruptcy.
In 2005, the two-hour educational classes were instated for those wishing to reduce their debts. The curriculum covers general financial topics including money management, budgeting, and proper credit use, reports the Iowa Independent. The study, conducted by researchers at the University of Iowa and Ohio found that most survey respondents who found the courses helpful were younger than 25, or older than 65.
"Teaching people to make different financial decisions can reduce the incidence of financial distress only if the distress is caused by a person’s financial knowledge," Katherine Porter, a University of Iowa law professor told the Independent.
Porter continued saying that the government has provided very little oversight for the program and has yet to formal conduct a study into its effectiveness.
The study found splits in how the classes were viewed by those of different ethnic backgrounds, and education levels.
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