Our Survey
Sed posuere consectetur est at lobortis.
Sed posuere consectetur est at lobortis. Cras mattis consectetur purus sit amet fermentum. Lorem ipsum dolor sit amet, consectetur adipiscing elit.
By Eric Rosenbaum
Click here to view the full article
KEY POINTS
- High school students go on to make better financial decisions in states that require personal finance coursework.
- That includes how to pay for college, taking out loans and loan repayment, avoiding payday lenders and credit card debt.
- Five states have no personal finance standard or requirement in public school: Alaska, California, Montana, New Mexico and Wyoming, according to the 2020 biannual Survey of the States from the Council for Economic Education.
Americans choose where they live for many reasons, including access to a quality education for their children. But families may not pay close attention to one educational standard that varies from state to state and can have big implications for financial well-being and, in particular, student debt: high school personal finance content.
There’s increasing evidence that students who are required to learn financial literacy as part of a state’s education curriculum make better financial decisions across multiple, and critical, early adult-life money decisions. That includes how to pay for college — understanding available grants and financial aid, as well as government vs. private student loans — and avoiding payday lenders and credit card debt.
“Research shows that these requirements make a difference,” said Nan Morrison, the president and CEO of the Council for Economic Education, which released its biannual Survey of the States on Wednesday, a detailed state-by-state look at the economics and personal finance standards and requirements in K–12 state education systems.
“College debt is real, and kids in the last population bump are living with it now … and having kids now. … The need to be financially responsible is not going away,” Morrison said. Individuals need to be “on the ball and in control” earlier in life, she said, and the first step is financial literacy.
Research conducted by two economists at Montana State University, Carly Urban and Christiana Stoddard, indicates that state-mandated financial education high school graduation requirements create more responsible student loan borrowers, increase applications for aid and the likelihood of obtaining grants and scholarships. Their analysis finds more students finance their educations through low-interest federal Stafford loans, and fewer students rely upon high-interest credit card debt.
The new state-by-state survey includes some encouraging developments.
Twenty-one states now require high school students to take a course that integrates personal finance content, which is a net increase of four states since the last survey, conducted in 2018. Iowa, Kentucky, Mississippi, Ohio and South Carolina have added the requirement since the last survey.
“That’s what I am happy about,” Morrison said. “We’re seeing it become more ingrained in the fabric of K–12 education.”
Florida, the third most populous state in the U.S., dropped the requirement that personal finance be taught as part of its economics curriculum in the past two years, but it did add a separate personal finance course, though it is not required to graduate and has not been allotted state funding.
“Florida is, I would say, to be determined. It’s moving forward, and the Department of Education is taking it seriously,” Morrison said, noting recent plans to revise its math curriculum to include personal finance.
Half the country (25 states) now requires high school students to take a course in economics, which increased by three states since 2018 (Hawaii, Ohio and Wyoming).
Only six states require a stand-alone personal finance course to be taken in high school — Alabama, Iowa, North Carolina, Tennessee, Utah and Virginia. But Morrison said integration of personal finance content into existing classes — such as math, economics, civics and career and technology courses — is the most important step. “Is five to eight hours in a course ideal? No? But it is still good for kids starting at zero,” she said.
The Montana State University professors find in their research that mandating financial literacy education is more important than the specific format in which it is taught. Improvements in college financing decisions do not results from personal finance being taught as a stand-alone course, they found, but from the critical decision to enact a state-level, top-down mandate.
It’s a social justice issue. Better education equips kids with the tools to make better decisions, to understand their first paycheck and take better care of themselves and their families.
– Nan Morrison
PRESIDENT AND CEO OF THE COUNCIL FOR ECONOMIC EDUCATION
The Council for Economic Education cited recent data from Next Gen Personal Finance, a nonprofit that provides free resources for personal finance content, illustrating why these mandates are…
This is only a preview. CLICK HERE to read the full article at cnbc.com
Sed posuere consectetur est at lobortis.
Sed posuere consectetur est at lobortis. Cras mattis consectetur purus sit amet fermentum. Lorem ipsum dolor sit amet, consectetur adipiscing elit.