Invest in the Future with Financial Literacy

In 17 states, a number that will hopefully continue to climb, it is a requirement to take a personal finance course, while economics is a requirement in just 22, with only 16 of those requiring standardized testing. In a 2008 survey, “The financial literacy of high school students has fallen to its lowest level ever, with a score of just 48.3 percent.” By this time however, students have the ability to understand the math and concepts behind financial literacy. It is time we start preparing students for a future not just academically, but financially  as well.

Ohio which ranked as the fourth worst state for financial literacy began making progress in 2016 when they passed Ohio House Bill 391. The bill awarded $318,000 to Smart Ohio, a program that helps fund teacher development, for training teachers in grades one through six in financial literacy. This enabled 500 teachers, who will teach 12,500 students these practical lessons. After its initial success, the program is  expanding to reach 75,000 students by 2021, giving it an average cost of only $8.48 per student.

In a 2014 study conducted by the Federal Reserve, researchers found that students in states with required financial education have “higher relative credit scores and lower relative delinquency rates than those in control states.” The longer the program was implemented, the better results became, thus showing improvement in the program. A 2015 study on the other hand found that more math actually improved financial literacy better than stand alone financial literacy courses. In states that had greater math requirements, students were “more likely to accumulate assets, have more real estate equity, are less likely to be delinquent on their loans, and are less likely to undergo foreclosure.” The idea comes from the fact that a majority of financial mistakes are due to people not understanding the cost of their decision. In order to be most effective, students need a mix of both courses. Showing students how to apply the math they learn to real world situations can make it easier to understand and provide motivation to learn the material.

In Lexington Massachusetts, a group of high schoolers have come together to form Project Finance. In an essay written by rising senior, Ryan Leung, winner of the National Economics Challenge in 2016, he begins by stating “If the goal of high school is to prepare students for life after graduation, then most schools in our country are not meeting that standard.” He goes on to explain how this leaves high schoolers to learn from their mistakes or their parents, who, for many, are not qualified in the area either. To combat this issue, a group of students formed Project Finance to push “for the adoption of financial literacy standards, and in March 2017 successfully requested the State Board of Education to review the Council for Economic Education’s National Standards for Financial Literacy for implementation into the state curriculum.“ The state maintained that there were initiatives in place and that the State Treasurer was working on it, while a separate restructuring of math and english courses aligned its requirements more with national standards. In the same year, 2017, Champlain College issued a report rating all states on “their efforts to produce financially literate high school graduates.” Massachusetts received an F along with 9 others, which seems like a stark contrast from how the state made the condition appear. It is absurd that a state number one in the country for best public schools, can be failing its students financially.

This year, Financial Literacy Day on Capitol Hill will be held on June 26th. This is a free event hosted for the public to voice their support. This years honorary hosts are U.S. Rep. Joyce Beatty (D-Ohio-3) and U.S. Rep. Steve Stivers (R-Ohio-15). Hill Day’s goal is to raise “awareness about the importance of financial literacy, the need for effective financial education, and the array of initiatives that are now addressing the issue.” Financial literacy is necessary for students to grow up and be financially responsible. Especially when 30% of high school graduates don’t go to college and are in the ‘real world’. It can be just as scary for those who go to college as well and have to deal with debt for the first time, or are of the age when they can begin investing and opening credit card accounts. Hopefully more states will understand the detrimental effects of not offering financial literacy courses to students and make proactive changes for a brighter future.