There are more payday lenders in the country than McDonald's or Starbucks.
Young adults who are required to take a personal finance class in order to graduate are 4 percentage points less likely to take out payday loans than peers who weren't required to do so, Harvey found.
That's a significant drop, considering that nearly 20% of people in the U.S. ages 19 to 31 report using the short-term loans.
Harvey compared the behaviors of individuals living in a state with a personal finance education mandate to older counterparts living in the same state and the same-aged counterparts living in a state without a mandate.
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In some classrooms — including those in Tennessee and Utah — the risks of payday loans are directly addressed. At other schools across the country, teachers stick to more general topics such as interest rates and debt management. Both forms instill a wariness in students around the loans after they've left the classroom, Harvey said.
Another recent study found that in states where personal finance education is mandated, students go on to make better decisions about how to pay for college. For example, they don't take on as much private debt.
"My goal at looking at payday loans was to speak to the applicability of these courses for situations that students will encounter in the very near future," Harvey said.
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