Poor often don’t know benefit of banks: Study by U Mass Dartmouth

Low-income families use costly check-cashing and loan services not because they lack access to banks, but because they lack knowledge of banking options and their advantages, according to a study by the University of Massachusetts Dartmouth.

For example, the study found that about one in four low-income residents in the New Bedford area do not have a bank account because they believe they cannot afford it - although most community banks and credit unions offer low-cost or free accounts as required by state law. In addition, the study found, even low-income residents with bank accounts still use check-cashing establishments more than their banks...

...On average, low-income people without bank accounts spend about 5 percent of their income, about $800 to $1,000 a year, on fees from check-cashing services, according to Bank On, a San Francisco program that aims to remove banking barriers for people with low incomes. That adds up to about $40,000 over a working life.

articles.boston.com/2011-07-06/business/29744008_1_bank-accounts-convenient-hours-and-locations-check-cashing-services

How to Change This? Tests Scores in Schools Closely Follow School Poverty Rates

The debate over how to fix Michigan’s education system often boils down to arguments over budgets, benefits, teacher tenure and class size.

Those issues may affect the way children learn in school, but U.S. Census figures hint at a single, overriding factor: Poverty.

Estimates of poverty and income show school districts with the lowest reading and math scores are often those with the highest poverty rates.

The pattern is clear both locally and statewide.

Across Michigan, such districts as Muskegon Heights, Flint Beecher and Benton Harbor have high poverty rates and low test scores.

The state’s wealthiest districts — including Bloomfield Hills, Northville, East Grand Rapids and Dexter — have median family incomes above $100,000 and very high test scores.

www.mlive.com/news/index.ssf/2011/08/school_achievement_closely_tra.html

P.S. For full disclosure, as of August 2011 I started working as an Interim Financial Officer for the Benton Harbor Schools.