It turns out Ontario isn’t the only place implementing finance education. Early in my searches I discovered that the United States has also been moving towards including economic and financial education for students over the last 15 years. I am extremely grateful to the Council for Economic Education (CEE) for publishing a summary of the economic and personal finance education offered in American schools called Survey of States. I feel like I hit the jackpot and saved myself many hours of work that I can use to expand my searches to other countries.
While the Survey of the States (SOTS) is only 8 pages- it is PACKED with relevant information. I will try my best to highlight the main parts and will include other stats from the document in future blog entries as needed. I looked over a few versions of the survey, but I will focus this entry on the most recent publication (2014). It is evident from looking at the document that there has been progress over the last 15 years (since the survey was first conducted) in economic and personal finance education. The SOTS also acknowledges that this progress has slowed in pace since the mid 2000’s.
I thought it was great to see that since 2009 all 50 states now require economics topics to be included in their standards. I was also impressed to see that 22 states require a high school course be taken in Economics and 17 states require a high school course be taken in Personal Finance. I noticed that many of these states are the same and I wonder if they have to have 2 separate courses to be a yes for both lists, or if states can offer one course covering both Economics and Personal Finance. The SOTS also tells us that in 2009 58% of high school graduates had taken a course in Economics. I am interested to know what Saskatchewan statistics are like for students taking Personal Finance. With only 1 locally developed curriculum offered at only one high school in Regina (that I know of) I know that the number of students graduating with a Personal Finance course would be limited.
The Consumer Financial Protection Bureau (CFPB) recommends that states mandate students complete a stand-alone course in personal finance in addition to including personal finance in the curriculum of other courses. They do say that schools can make a Personal Finance course optional as an incremental step, but that this would still leave many students graduating without important financial skills. I feel like this would be the best plan as well.
The SOTS report also provides 5 essential strategies for advancing financial education (published by the CFPB):
1. Introduce financial concepts early and continue to build on them through K-12 years. It is encouraged to make a stand-alone financial education course a graduation requirement for high school students.
2. Include personal finance questions on standardized tests.
3. Provide K-12 students opportunities to practice money management through hands-on learning opportunities.
4. Provide opportunities for teachers to complete financial education training.
5. Encourage parents to discuss money management topics at home and provide them with the tools they need.
Other interesting tidbits from the SOTS (2014):
– A 2012 National Financial Capability Study (NFCS) found that 36% of respondents aged 18-34 had student loan debt and a startling 55% of this group were concerned they may be unable to pay this debt.
– NFCS’s 2012 survey also told that only 1/3 of respondents had an emergency savings, 31% had unpaid medical bills, and almost half had a balance on their credit card.
– In Mississippi 41% of credit card holders are making only minimum payments and nationally this is not much better.
The SOTS shows that efforts to implement mandatory finance education appear to be most effective when they are state required and the implementation is supported by outside the school organizations that work to assist with teacher training and resource development. For example, in 2009 the Arkansas Department of Education made an Economics course mandatory for Graduation. In one year Arkansas went from 2 school districts to over 250 schools districts with this requirement for an Economics course. Economics Arkansas helped to ease the transition by offering activities-based lessons for teachers to use as well as teacher workshops.
Reading through the Survey of the States reports has made me realize just how large the movement is to teach personal finance skills and economics in schools. Seeing the information from both Ontario and the U.S. has made me hopeful that there might be a future for finance education in SK, but also frustrated that we aren’t currently teaching anything. I also like their 5 essential strategies because they address both teacher training and need to get parents involved.
“Just as it was not possible to live in an industrialized society without print literacy- the ability to read and write- so is it not possible to live in today’s world without being financially literate. To fully participate in society today, financial literacy is critical.” -Annamaria Lusardi, Denit Trust Professor of Economics and Accountancy at the George Washington University School of Business, and Director of the Financial Literacy Center