Lackluster Financial Education Standards in U.S. High Schools

How did you learn to balance a checkbook or invest in your 401k? Did you have a formal education on the subject? Did you seek a professional? Or did you just figure it out? The type of financial education you receive as a U.S. high school student depends largely on what state you are in. We have requirements ranging from personal finance as a mandate – for all students – to states that don’t include it in their education standards.

Teachers today are pushed to their limits. As a result, increasing access to personal finance education is not a top priority. It is expected that parents pick up where the schools leave off. However, many parents are ill-equipped to continue their children’s financial education. They may lack confidence in their knowledge, or it may not seem critical to teach them at all. Many are unable to teach their children because their own knowledge of managing their finances is incomplete.

The Council for Economic Education conducts a biannual survey called Survey of the States. In the survey they break down states’ education requirements into the disciplines of economics and personal finance education. In 23 states an economics course is required to be offered to high school students and in 22 states students are required to participate in the coursework. In 22 states a personal finance education course is required to be offered. However, only 17 states actually require students to take the class. Of those 17 states only five require a standalone class, with the rest allowing that education to be integrated into another course.

According to the Survey of the States website, “More than half of Millennials say they are living paycheck to paycheck and are unable to save for the future.” Despite legislation enforcing disclosures on credit cards “75% of credit card carrying college students were unaware of late charges.” These statistics are scary. If states were to implement more financial education guidelines would it improve the financial status of millennials and the next generation? According to statistics published by the National Financial Educators Council, three years after implementing a financial education mandate in Georgia, Idaho, and Texas all but three states saw increased credit scores and lower delinquency rates on credit accounts. **FINRA Investor Education Foundation State Financial Education Mandates

A March 2016 survey done by the National Financial Educators Council found that 18 to 24 year olds thought a course in personal finance would benefit their life the most when compared to other subject areas including mathematics, science, and social studies. Expanding access to personal finance courses may be the change we need to set future generations on path to financial success.

Elise Murphy
Elise Murphy