federal reserve's periodic survey of consumer finances ( scf ) suggest that a higher level of education significantly increases the chances that a household will use an electronic banking product. in particular, in 1998, the typical user of an electronic source of information for savings or borrowing decisions had a college degree - a level of education currently achieved by only about one - third of u. s. households. the most recent data from the survey reveal a good news - bad news picture of the financial status of households, providing evidence that we need to reach further to engage those who have not been able to participate fully. for example, while the median real net worth for all families increased 17 - 1 / 2 percent between 1995 and 1998, this trend did not hold true where the head of the household had a high - school level of education or less, family earnings were less than $ 25, 000 annually, or the ethnicity of the respondent was non - white or hispanic. that families with low - to - moderate incomes and minorities did not appear to fully benefit from the highly favorable economic developments of the mid - 1990s is, of course, troubling, and the survey results warrant a closer look. in the details, we find that families with incomes below $ 25, 000 did increase their direct or indirect holdings of stock, and more reported that they had a transactions account. however, they were less likely to hold nonfinancial assets - particularly homes, which constitute the bulk of the value of assets for those below the top quintile according to income. at the same time, one encouraging finding from surveys conducted by the bureau of the census is the increasing homeownership rates for minorities. for example, the homeownership rate for blacks increased from 42. 9 percent in 1995 to 48. 6 percent through the second quarter of 2001. the homeownership rate for hispanics also rose, from 42. 0 percent in 1995 to 46. 1 percent through the second quarter of 2001. this trend may be a sign of improved access to credit for minorities. other recent findings of the scf include a rise in families'median level of debt burden, financial stress ( defined as debt payments that represent more than 40 percent of income ), and incidence of late payments on debt. the findings showed increases in each of these categories across all income and age groups, with the highest levels of financial stress among households headed by people 65 and older and earning less than $ 25, 000 annually.

alan greenspan : the importance of financial education and literacy remarks ( via videoconference ) by mr alan greenspan, chairman of the board of governors of the us federal reserve system, before the national council on economic education, chicago, 26 october 2001. * * * i am pleased to address your conference today. education is a critical issue for our country, and economic education is of particular concern to those of us at the federal reserve. throughout our economic history, we have seen significant adjustments to enable markets to respond to the demand for services. structural changes in recent years have heightened competition, encouraging market efficiencies that continue to help drive down costs, and fostered the emergence of increasingly diverse and highly specialized organizations. these organizations - ranging from firms that offer their services through electronic delivery mechanisms to local partnerships that provide one - on - one counseling and financing arrangements - provide consumers increased access to a variety of credit and savings instruments. for this ever - more complex financial system to function effectively, widespread dissemination of timely financial and other relevant information among educated market participants is essential. informed judgments by consumers are required to foster the most efficient allocation of capital. constant change, of course, can be unsettling no matter how beneficial, and one challenge economic and financial educators face is overcoming consumer anxiety about the new products and choices they encounter. but just as the rapid adoption of new information technologies has expanded the scope and utility of our financial products, so too has it increased our means for addressing some of the associated educational challenges. for example, universities provide remote learning options to allow students to pursue continuing education via the internet. financial service consumers can use web - based calculators to create customized budgets, or to develop long - term savings strategies for retirement or a college education. in both scenarios, technological advances represent the opportunity for achieving efficiencies and exercising preferences. this promise can only be met, however, when the end - users know how to obtain pertinent information and how to capitalize on the available knowledge. education enabling individuals to overcome their reluctance or inability to take full advantage of technological advances and product innovation can be a means of increasing economic opportunity. as market forces continue to expand the range of financial services, consumers will have more choice and flexibility in how they manage their financial matters, and they will demand education about use of the new technologies to make informed decisions. indeed, surveys repeatedly demonstrate a strong link between education and the use of new financial technologies. for example, data from the