Should Financial Literacy be a Graduation Requirement?

In 2014, the Council for Economic Education released a survey of the states that revealed some relevant information about K-12 economic and financial education in the U.S.

It found that last year, 19 states require a personal finance course to be offered, up five states from 2011. However, despite the increase of required finance courses, the number of states that included personal finance in their K-12 standards actually decreased by three as states scrambled to update standards under new waivers and using the Common Core.

But despite the fact that financial literacy education is up-in-the-air as to how important it is considered on a state-by-state basis, a 2012 survey from the FINRA Investor Education Foundation found that nine out of ten respondents support financial literacy being taught in schools.

Which States Require Financial Literacy

Currently, only four states require a stand alone personal finance course for graduation credit. Those states are Utah, Missouri, Tennessee and Virginia.

Nevada, Idaho, Arizona, Texas, Oklahoma, Kansas, Colorado, South Dakota, Louisiana, Illinois, Indiana, Kentucky, Ohio, West Virginia, North Carolina, South Carolina, New Jersey, New York and New Hampshire all require personal finance to be incorporated into other subject matter in some capacity, according to Jumpstart.org. 

Finance in the Classroom: Goals and Teacher Requirements

Utah has made its initiatives to practice financial literacy in its public schools available to all through financeintheclassroom.org. Here, it outlines its course goals for the financial literacy classes it requires students to take before graduation.

The General Financial Literacy Course, which is required for Utah’s juniors and seniors for a half-credit, describes students who complete the course should:

• Be informed and prepared to be effective managers of financial resources, enabling them to achieve long- and short-term financial goals and security.
• Be engaged in establishing career goals that will provide adequate income and personal fulfillment.
• Demonstrate an understanding of personal financial planning and money management skills.
• Understand personal and societal consequences of financial decisions.

Part of the problem with requiring finance education is finding the teachers to teach it. It’s no secret that many subject areas face teacher shortages, so requiring trained teachers for a newly introduced subject is a hard feat for many states.

In Utah, teachers are found eligible for teaching financial literacy through application for endorsement, where requirements include a Secondary Education License, the completion of a General Financial Literacy Boot Camp (a full semester course that is four week on-line and one day in-person) and the completion of the following college level courses: Personal Finance, Microeconomics or Macroeconomics, one additional finance or economics course and two related electives. The application also carries a $25.00 endorsement evaluation fee.

Teachers interested in signing up to teach personal finance in Utah can also do the State Approved Endorsement plan route, which allows them two years to fulfill course requirements and a fee of $35.00. h

In other words, teaching financial literacy isn’t an easy feat, and some states may be reluctant to dive into making it a requirement for this reason.

Why Financial Literacy is Important

Even though states may face early challenges when implementing a financial literacy graduation requirement, it has been proven to significantly help teach students skills they’ll need for life.

According to a survey sponsored by Discover, “[h]igh school seniors who had taken a personal finance class were more likely to save money (93%, compared to 84% of students who hadn't taken a class), have a budget (60%, compared to 46%), and invest (32%, compared to 17%),” Business Insider said. 

And the lack of financial literacy knowledge from adults proves that they could have used some guidance in their K-12 education. According to the FINRA Investor Education Foundation survey, just 39 percent of 25,509 adults surveyed could answer at least four of five multiple choice questions on calculations, mortgage payments and investments.

Resources for Teaching Financial Literacy

If you're interested in integrating financial literacy in your classroom but aren’t in one of the states that have requirements and are in need of resources, Education World has a list of materials for you to utilize.

Check out this full list of online resources, games, printable worksheets, teacher materials and even resources for family financial planning here. 

Article by Nicole Gorman, Education World Contributor

11/02/2015