As College Debt Rises, So Does Interest in Teaching Financial Literacy

After languishing for a few years, support for teaching money-management skills to high school students has reignited, financial literacy advocates say. They attribute much of the newfound interest to worries about mushrooming student debt.

High school students “are asked to make a consequential decision,” said Annamaria Lusardi, founder and academic director of the Global Financial Literacy Excellence Center at George Washington University’s School of Business. “Whether or not to go to college, and how to finance that decision.”

The Council for Economic Education, which promotes economic and financial instruction, reported last year that just 17 states required high school students to complete a course in personal finance — unchanged from the council’s report published two years earlier.

But a recent flurry of mandates and proposals in more than a dozen states suggests that efforts to formally include money matters in high school classrooms are gaining traction.

“There was a lull,” said Nan Morrison, the council’s chief executive. “But now we’re seeing movement.”

Iowa, for example, passed a law in 2018 requiring all high school students, beginning with the class of 2020, to complete a half-year personal finance course as a graduation requirement.

And Kentucky passed a law last year requiring students to take courses or programs that meet state financial literacy standards as a graduation requirement, starting with the class of 2025.

This year, laws were proposed in several states to enhance financial education. They include a bill introduced in Florida that would require high school students to take a course to learn about credit scores and other money management topics.

And a measure introduced in Rhode Island would require all public high schools to offer a class that included personal finance beginning in the coming school year. The measure would also require students to demonstrate proficiency in personal finance by the 2021-22 school year.

Ms. Lusardi, at George Washington University, said research showed that one in five American high school students lacked even basic financial skills — such as the ability to interpret a pay stub to determine how much money will be deposited into their bank account or the savvy to avoid being tricked into sharing an online bank account logon.

The average student debt in 2017 was about $29,000, according to the Institute for College Access and Success. About a million borrowers default for the first time on their federal student loans each year, a report from the Urban Institute found.

The latest steps taken by various states may help their financial literacy “report cards,” said John Pelletier, director of the Center for Financial Literacy at Champlain College in Vermont. Under Mr. Pelletier’s oversight, the center compiles a periodic report that assigns each state a letter grade, based on its commitment to financial literacy instruction.

Just five states earned an A in the center’s most recent analysis, which was issued early last year and included data as of mid-November 2017. But Mr. Pelletier said he expected that several states might improve their grades in his next report, due at the end of this year.

“There’s been movement, for sure,” Mr. Pelletier said, adding that whether all the proposals become law remains to be seen.

Here are some questions and answers about financial literacy efforts:

How can I find out if my school district offers personal finance instruction?

The JumpStart Coalition for Personal Financial Literacy, a nonprofit group that promotes financial education in schools, recently started the Groundswell initiative with the aim of increasing financial literacy programs by 25 percent by 2025.

The program’s new website,, lets users search by their school district to see what sort of personal finance instruction is offered. The program also provides suggestions for parents and families to push for adoption of new courses.

What topics should a high school personal finance class cover?

Several groups, including the Council for Economic Education, publish standards along with benchmarks for each grade level. The council’s benchmarks advise that by Grade 12, for instance, students should be able to calculate how much a 10-year-old would need to save today to pay one year of college tuition eight years in the future.

Mr. Pelletier said the instruction should include bedrock financial concepts, like the effect of compound interest on savings and investments, and lessons on how your credit score affects borrowing costs over time.

How can parents encourage financial literacy at home?

Many parents are uncomfortable talking about money, advocates say, or don’t know where to start. Fast Lane, a new initiative of the Global Financial Literacy Excellence Center that seeks to expand financial education in high schools, offers free, research-based resources not only for educators but also for parents of high school students. The site includes suggestions for online money games that families can play together to help break the ice.

Also, JumpStart offers a clearinghouse of resources, searchable by age and topic, to help generate conversation; some are free.

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