Personal Financial Literacy Education Lacking in CT Schools

Only five states require a stand-along course in Personal Finance for high school graduation.  Connecticut is not one of them. With a statewide requirement unlikely, students in at least one town are trying to take matters into their own hands by advocating for financial literacy to be a graduation requirement.

In West Hartford, a student-driven petition has amassed about 600 signatures, The Hartford Courant reported recently.  For the class to be required, the town’s Board of Education would need to approve it.   

Two national reports highlight the lack of a requirement for financial literacy in order to graduate high school.  Fundamental knowledge, such as how to manage a checkbook and the impact of interest on outstanding loans or credit card purchases are staples of personal finance courses when they are offered.  Some schools in Connecticut offer such classes, but only a small percentage of students tend to take them, because they are not required.

One national report said of Connecticut, “personal finance is not included in the graduation requirements either as a stand-alone course or embedded in another course. And personal finance is not required to be offered or taken.”

Another national analysis noted the following:

• Since 2014, two additional states include personal finance in their K-12 standards and require those standards to be taught.
• While more states are implementing standards in personal finance, the number of states that require high school students to take a course in personal finance remains unchanged since 2014 – just 17 states.
• Only 20 states require high school students to take a course in economics – that’s less than half the country and two fewer states than in 2014.
• There has been no change in the number of states that require standardized testing of economic concepts – the number remains at 16.
• 75 percent of credit card carrying college students were unaware of late payment charges.

Connecticut’s Social Studies Framework, adopted a year ago, includes economics, economic decision-making, exchange and markets, the national economy and the global economy among “supporting disciplines” among the main concepts for world history instruction in grades 9-12.

Personal financial literacy, however, is not included.

The 2016 Survey of the States by the Council for Economic Education (CEE) shows that there has been slow growth in personal finance education in recent years and no improvement in economic education.

Every two years, CEE conducts a comprehensive look into the state of K-12 economic and financial education in the United States, collecting data from all 50 states and the District of Columbia. The biennial Survey of the States serves as an important benchmark, revealing “both how far we’ve come and how far we still have to go.” This year the report concluded that nationally “the pace of change has slowed.”

Connecticut state Sen. L. Scott Frantz has tried unsuccessfully to improve financial education in Connecticut for seven of the past eight years with proposed legislation that would require it, the CT Post reported recently. This year, due to a strong focus on the state budget, he’s been told introducing the bill again would be moot, so will wait until next year to broach the topic again, the Post reported.

“You have generations of kids graduating without a clue about managing their personal finances,” Frantz said. “It doesn’t have to be anything more sophisticated than how to balance a checkbook, understanding a credit card and interest rates, being aware of the marketing tactics that credit card institutions use. It’s an area that we need to improve upon significantly going forward.”

Champlain College's Center for Financial Literacy, using national data, graded all 50 states and the District of Columbia (D.C.) in 2015 on their efforts to produce financially literate high school graduates. In their review, 26 states received grades of C, D or F. Less than half were given grades A or B, and 29% had grades of D or F.  Connecticut was among those earning an F.

Of the states with failing grades, the analysis said: These states have few requirements or none at all for personal finance education in high school. High school students in these states are able to graduate without ever having the opportunity to take a course that includes financial literacy instruction.  The report noted that California, Connecticut, Massachusetts, Pennsylvania, Washington and Wisconsin have created programs that promote financial literacy education in high schools. However, this support does not eliminate the possibility of a student leaving high school without access to any financial literacy instruction prior to graduation.

“States that combine personal finance and economics, support teachers, and hold students accountable for learning objectives have the best chance of promoting the development of young people who are better financial managers and stewards of their credit—behaviors with which many, if not most, young people tend to struggle,” said J. Michael Collins of the University of Wisconsin-Madison’s Center for Financial Security. “Rigorous state standards can facilitate local schools to implement well-designed programs, which in turn expose students to concepts they otherwise would not learn.”

Connecticut Receives "F" in Report Card on High School Financial Literacy Requirements

Connecticut received a resounding F in a state-by-state Report Card of financial literacy education requirements at the high school level, according to a study by the Center for Financial Literacy at Champlain College in Burlington, Vermont.

Connecticut is one of 11 states to receive a failing grade.  The others were Alabama, Alaska, Arkansas, California, Delaware, Hawaii, Massachusetts, Nebraska, Rhode Island and Washington.  Those states, according to the report, “have few requirements, or none at all, for personal finance education in high school.”

Overall, 60 percent of states received a C, D or F while 40 percent of states received an A or B grade.  Among those at the head of the class, receiving an A, were Georgia, Idaho, Louisiana, Missouri, Tennessee, Utah and Virginia.  Four of those states – Virginia, Utah, Tennessee and Missouri – require a one-semester standalone course in personal finance as a graduation requirement.

The report, 2013 National Report Card on State Efforts to Improve Financial Literacy in High Schools, indicated that in Connecticut:

• Personal finance topics are included in the state’s educational guidelines but the state does not require that local school districts teach these topics. (Source: CEE Survey)
• No personal finance requirement, although personal finance may be taught at certain schools as an elective. (Source: Jump$tart Survey)
• Since 2007 Connecticut legislators have introduced seven bills in an attempt to bring financial literacy into their schools. All attempts have failed. In 2009 the state passed a law allowing banks to open branches in schools to help students learn about saving money. (Source: NCSL Summaries)

The report suggests four key elements to a successful financial literacy program at the high school level:

1. Requirement: Financial literacy topics must be taught in a course that students are required to take as a graduation requirement.
2. Training: Teacher training is critical.  To effectively educate our students about personal finance, we need confident, well-trained educators.
3. Funding: Funding is needed to ensure that these classes are offered to all high school students.
4. Assessed:  In order to make sure that the high school classroom personal finance training is working, we need to give students standards assessments on knowledge and behaviors.

Noting the lack of financial literacy education across the country, the report indicates that “for our nation’s youth, learning is often being down through personal experience.  Making mistakes with your credit is a painful way to learn a life lesson.”  The report’s introduction also notes that “to improve personal finance outcome for American citizens, our nation must be educated in personal finance… In too many of our states, our youth receive little if any personal finance training in middle school, high school and college.”

Students Want Financial Education Before High School Graduation

While more than 3 of 4 teens (76%) believe the best time to learn about money management is before graduating high school, less than 3 in 10 (29%) reported programs currently in place, according to a national survey of teens.  Those statistics stand out  in the latest Junior Achievement USA^® (JA) and The Allstate Foundation 2013 Teens and Personal Finance Poll. The gap between students who want financial education and those who receive it  is precisely the gap that JA volunteers seek to fill - which explains why more volunteers are needed.  JA is a partnership of educators and volunteers from business and the community. The survey also found that 25 percent of teens think they will be age 25-27 before becoming financially independent from their parents, up from 12 percent in 2011. Concurrently, parents are also expecting their children to be in their mid-20s by the time they are financially independent, as the economy, availability of jobs and societal norms now indicate a longer dependence on parents.

More than one-third (34%) of teens said are somewhat or extremely unsure about their ability to invest money.  Even as credit cards are aggressively marketed to teens, 20 percent remain somewhat or extremely unsure about their ability to use credit cards. And of the 33% of teens who say they do not use a budget, 42% are "not interested" and more than one-quarter (26%) think "budgets are for adults."

JA provides volunteers with everything they need to be successful in the classroom, including comprehensive classroom materials, step-by-step lesson plans and training, a choice of grade (K-12) and a school location close to home or work and a connection to an individual teacher to coordinate times during the school day for as few as five lessons, each lasting approximately 45 minutes.   Providing children with positive adult role models, who illustrate ways to build self-confidence, develop skills and find avenues of success in our economic system, is a hallmark of Junior Achievement.

”JA delivers specific, effective programs in the classroom that respond to the knowledge gap,” said Louis J. Golden, President of JA of Southwest New England.  “Far too many teens lack a fundamental understanding of how to manage their money.  The poll reminds us that students recognize that.  JA provides young people the knowledge, tools and inspiration to understand our economy and their own finances, and make their way in the world.”

Last year, more than 2,500 volunteers - business professionals, parents, retirees, and college students – offered JA programs to more than 34,500 students in schools throughout Hartford, Litchfield, New Haven, Windham, Tolland, New London and Middlesex counties.  There are ongoing programs at the elementary, middle school and high school level, as well as afterschool programs.

“Classroom volunteers make economic concepts relevant, fuel the entrepreneurial spirit, and challenge the students to excel,” Golden said.  “They help provide the financial knowledge before college that students are seeking.”

To learn more about the JA volunteer program, contact 860-525-4510 or visit www.jaconn.net for details.

Survey Reveals Teens Unprepared for Costs of College, Uncertain About Future

As prospective college students receive word this month on whether they’ve been accepted to their preferred institution – and how much financial aid they’ll be receiving - the greater challenge begins.  That’s the grueling exercise to crunch the numbers to try to come up with ways to afford the impending and imposing tuition bill. That reality makes the findings of the Junior Achievement USA^® (JA) and The Allstate Foundation's 2013 Teens and Personal Finance Poll ring alarm bells for teens and their families, as they look ahead to the financial impact of college:

• Only 9% of teens report they are currently saving money for college.
• More than a quarter of teens (28%) haven’t talked with their parents about paying for college.
• More than half (52%) of teens think students are borrowing too much money to pay for college.

JA is helping students understand the importance of saving and planning for future financial needs, working with students from kindergarten through 12^th grade.  That’s at the core of JA’s work, driven by volunteers who provide a real-world view for students.  To meet the need reflected in the latest data and reach more students, JA has opportunities right now – often at a school close to home - for volunteers to participate.

The increasing cost of college, difficult job market and sluggish economy appear to be affecting teens’ views on the timetable for attaining financial independence, and the prospects for their long-term financial security.  According to the poll, during the past two years the percentage of teens who:

• Think they will be financially dependent on their parents until age 25 has more than doubled – from 12% in 2011 to 25% in 2013.
• Say they don’t know or are not sure at what age they will attain financial independence from their parents jumped from a mere 1% in 2011 to 11% in 2013.
• Don’t know or who are unsure if they will be financially better off than their parents has risen significantly, from 4% to 28%.

Teens’ uncertainty about their financial future is also a reflection of their lack of financial knowledge and understanding.  More than one-third (34%) are somewhat or extremely unsure about their ability to invest money.  And of the 33% of teens who say they do not use a budget, 42% are "not interested," and more than a quarter (26%) think that "budgets are for adults."

“Today’s teens expect to be financially dependent on their parents longer, and the number who can’t even predict when they might gain financial independence has jumped ten-fold in just the past two years,” said Louis J. Golden, President of JA of Southwest New England.  “The economy certainly plays a role, but part of the uncertainly is because far too many teens lack a fundamental understanding of how to manage their money.  JA delivers specific, effective programs directly to the classroom that respond to that knowledge gap.”

JA's unique delivery system provides the training, materials, and support necessary to build student skills in financial literacy, work readiness and entrepreneurship. Last year, more than 2,500 volunteers - business professionals, parents, retirees, and college students – offered JA programs to more than 34,500 students in schools throughout Hartford, Litchfield, New Haven, Windham, Tolland, New London and Middlesex counties.

The volunteers use their personal experiences to make the JA curricula practical and realistic. Providing children with positive adult role models, who illustrate ways to build self-confidence, develop skills and find avenues of success in our economic system, is a hallmark of Junior Achievement.  Individual interested in learning more about the JA volunteer program should contact 860-525-4510 or visit www.jaconn.net for details.