Just this year, California became the 26th state to require financial literacy as a condition for graduation, contributing to a growing trend across the country. This requirement will add nearly two million California high school students to the more than five million students in states that also have passed a requirement, according to National Endowment for Financial Education, which vociferously advocates for efforts to advance financial well-being.
Experts point out that, during the pandemic, policymakers became more eager to require financial literacy curriculum in schools because they became acutely aware of the financially precarious situations in which many of their constituents existed. Compound that with today’s cost-of-living challenges, and it’s easy to see why financial literacy laws are on the books in 50% of our states and gaining momentum in others. Parents are on board, too, and adults in general are overwhelmingly in favor of financial literacy education.
In today’s world of constant controversy and wedge issues, teaching children how to make sound fiscal decisions is an idea that doesn’t polarize. It unifies.
The Dollars Make Sense
The benefits of learning money basics are undisputed. Investments in financial education have positive effects on students’ knowledge and behaviors. When students understand the landscape of personal finance, they use sound judgment to navigate it. A report from Montana State University revealed that financial literacy courses also led more students to low-interest college financing and away from high-interest loans and increased repayment rates for first-generation students and those from low-income families.
MSU economics professor Carly Urban, who conducted the research, said financial literacy laws are paying off for students. Her findings show that requiring financial education improves credit scores, reduces delinquency rates, curtails the use of alternative financial services like payday lending, and has a positive impact on the way they finance their college education.
“They’re less likely to use credit cards while they’re in school, and they’re more likely to get grants and scholarships – those up-front types of funding – rather than subsidized loans,” Urban said.
It’s not hard to see how a firm foundation in financial literacy can help students create a budget, avoid financial fraud, manage debt responsibly, and keep their personal spending from running amok. All these skills support life goals.
Interest Is Rising
The trend by policymakers to enact financial literacy laws has momentum. The author of an annual report on the topic puts the recent growth into perspective. “In five short years, more than four out of 10 U.S. high school students will be enrolled in schools where a stand-alone, full-semester course in personal finance is required before graduating,” director of the Center for Financial Literacy at Champlain College John Pelletier said. “That’s a 229% increase from 2017.” The financial literacy movement is growing.
And all things considered, financial literacy courses are a low-cost investment for states. Yet, states are struggling to attract and retain teachers for core subjects, let alone for new courses like financial literacy.
When policymakers impose mandated courses on schools, they don’t always provide the necessary funding to implement those courses. Even if they did, in today’s climate, where the majority of the country’s public K–12 schools have trouble hiring fully certified teachers, it’s challenging to find personnel to teach classes outside of the core realm of math, science, English Language Arts, and social studies. This poses a conundrum for school administrators.
The teacher shortage is taking a toll. Some states are stepping in to help alleviate the shortage by initiating stipends for student teachers in some cases and creating shortcuts for full-time teacher licenses in others. Those teachers currently in the classroom are often overworked, underpaid, and starving for professional development opportunities in spite of the drain on their already packed schedules.
Digital Curriculum Yields Big Dividends
Fortunately, today’s educators and administrators have the luxury of digital tools at their fingertips. They can tap into reputable resources that provide perfunctory assessments of basic financial literacy. Quizzes like this one from the Financial Industry Regulatory Authority provide an assessment tool and the Council for Economic Education’s personal finance quiz can provide a good baseline from which to begin instruction. Naturally, myriad games and apps are available online to provide an interesting and fun approach to learning how to manage money.
A more comprehensive, tailored approach exists in online courses like those offered by the nonprofit digital curriculum and service provider Lincoln Learning Solutions. The course can be delivered through a variety of models, including online, in a hybrid setting, or within the classroom.
Chief Academic Officer Charles Thayer points out that the Lincoln Learning Financial Literacy course is nationally aligned and can be adapted to meet specific requirements set forth by states. The curriculum is cost effective and provides flexibility. It allows students to receive instant feedback on their progress and affords them the opportunity to rewatch and revisit lessons that they may not have completely grasped initially.
Finding A Balance
Teaching financial literacy is worthy. Providing young people with sound decision-making skills clearly makes them smart consumers. Until schools are in a stronger position to hire qualified professionals to bring their teaching complement up to their standards, digital courses can serve as a valuable tool for students to gain a firm footing on financial matters.
Lincoln Learning’s Financial Literacy course can give students tools to prosper and grow on their journey to becoming fiscally responsible adults. Schools can take a look at the Financial Literacy pacing guide now and learn more.