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.
Earlier this year, laws were proposed in several states to boost 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 includes personal finance beginning in the upcoming school year. The measure would also require students to demonstrate proficiency in personal finance by the 2021-2022 school year.
Lusardi, at George Washington University, said research showed that 1 in 5 U.S. 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.
The average student debt in 2017 was about $29,000, according to the Institute for College Access and Success. About 1 million borrowers default for the first time on their federal student loans each year, said a report from the Urban Institute.
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 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 grade in the center’s most recent analysis, which was issued early last year and included data as of mid-November 2017. (Minnesota received a B.) But Pelletier said that he expected that several states may improve their grades in his next report, due at the end of this year.
“There’s been movement, for sure,” Pelletier said.