This story is published in partnership with The 74, a non-profit, non-partisan news site covering education in America.
Seven years after students at a small suburban Rhode Island high school successfully advocated for statewide financial literacy standards, lawmakers made mastery of personal finance a requirement for high school graduation from the class of 2024.
Enacted by Governor Dan McKee on June 1, the requirement carries a December 31 deadline to develop and approve state-specific consumer education and personal finance standards. By the start of the 2022-2023 school year, all public high schools in Rhode Island must offer a course that meets these standards.
“It is very aggressive to put these standards in place within the time frame that we have set, but we know that it is really necessary,” said state education commissioner Angélica Infante-Green. One reason: On average, Rhode Island graduates have the second highest student loan debt of any state, at $ 36,193.
After meeting with students from across the state who thought they weren’t ready to go to college, and given the impact of the pandemic on student engagement, the commissioner said this Now was the time to consolidate what they had been building for years.
“[Students] felt like it was something they were wronged [on]. We have therefore endeavored to move this agenda forward. ”
Rhode Island approved the National Council on Economic Education standards in 2014. On average, only about 5% of students in Rhode Island receive financial literacy training, according to the state Department of Education; until now, schools could choose whether or not to adopt the program.
Last year, East Greenwich High School senior Saloni Jain took a personal finance course in a blended learning setup, with three days of e-learning. She said lesson simulations, such as making false tax returns on TurboTax and creating a budget spreadsheet, kept her engaged during virtual learning.
“We were getting paychecks – how do we put that money into a 401 (k) and pay all of our bills and pay off our credit card or student loan debt?” It’s been very helpful in visualizing, you know, how we might live in the future, ”Jain said. “It was just a semester course, but honestly it changed my thinking a lot.”
Financial Literacy: An Antidote to Poverty?
Nationally, 21 other states have a version of the Financial Literacy Standards, which can be incorporated into math or civics classes; only seven require a full-semester stand-alone course to be taken before graduation.
In 2021, more than 25 states introduced bills to strengthen personal finance education. Advocates argue that literacy is the key to breaking cycles of poverty, especially as the younger generation grapple with the economic fallout from the pandemic. When loans, budgeting, and debt management are explicitly explored during the school day, young people are exposed to life-changing information as they move into adulthood.
A 2018 study by researchers at Montana State University found that financial literacy degree requirements translate into lower credit card balances, less high-interest student loan debt for students at low income and a decrease in the use of private loans for high income students. Working-class and lower-class students who took financial literacy classes were also able to work less while in college, which could encourage persistence and graduation. Expanding access to personal finance courses can help reduce racial wealth gaps and support homeownership down the line.
Even in states considered to have the highest standards and requirements, students are looking for more real-world connections to prepare for the future. Whitman Ochiai, who recently graduated from high school in Alexandria, Virginia, described his compulsory course as “broader than deep.”
Left to ponder retirement decisions, building a balanced budget, and the intuition behind big purchases, he launched the MoneyEd podcast in 2019 to explore these topics. He said there had been increased interest throughout the pandemic, likely with more students working and families facing economic uncertainty.
“Often the only people who have access to this information are the ones who would have had access to it anyway,” Ochiai said. “Especially for first-generation college students, and parents who may not be homeowners, this is a way for them to gain a deeper understanding of finance.”
In RI, a scattershot approach so far
Some teachers in Rhode Island have created elective courses in their schools in recent years, taking into account student desires and seeing how financial literacy can make connections to hard-to-grasp concepts like compound interest. But until now, funding and implementation has been left to the priority of teachers or schools.
Samantha Demairias teaches math, financial literacy, and computer science at Central Falls High School. She hopes the legislation will open the door to state financial support for accreditation and hiring, thus strengthening the ability to teach the subject.
Otherwise, she said, “there’s going to be a disproportion between the districts that are able to move around their budgets or their staff and make it work and the districts that are weighted by all these other things.” .
Demairias teaches about three sections of finance per year; enrollment is still higher even with its elective status, at around 25 to 30 students per class. This fall, she will also teach a section for English language learners to introduce students to the American money and credit systems.
“If you like to learn something today, spread this news and talk it over with your friends. There is no reason why talking about money is such a taboo subject, ”she explains to her students.
Advocates say personal finance education offers students the opportunity to break the stigma attached to conversations about money before embarking on big financial decisions such as student loans, car ownership and financial decisions. credit card debts. The lessons learned can also find their way home and support families facing economic challenges.
“I see the state’s implementation of this financial literacy guarantee as a kind of gateway to meaningful engagement with families,” said Pat Page, business educator and vice president of the Personal Finance Coalition. JumpStart from Rhode Island.
Page, a former teacher of the year in Rhode Island, has been a strong advocate for broader financial education for years and was one of the first in the state to teach a stand-alone course. She has helped students, including Sunny Sait, testify before the state legislature about the need for broader financial education – in 2014, 2019 and again this year.
See money as something to invest
Although Sait took Page’s course two years ago, he said he still uses the concepts on a daily basis. Now in a gap year after graduating last spring, he opened a Roth IRA and is budgeting his internship salary to make sure he can still afford the things he loves, like karate.
“My mindset has definitely changed a bit from thinking about money in terms of things, but more about thinking about money as a means of growth, saving and investing. My goal is really to move on. from buying, like being a consumer, to becoming an investor. ”
Treasurer Seth Magaziner, who started his career as an elementary school teacher and is currently running for governor, helped introduce financial education legislation.
“The most ardent advocates, who worked very hard to get this bill passed, were the teachers and students – students who really wanted it taught, and teachers who are willing to teach it,” said Shop.
Both the treasurer and the education commissioner see signing the law as the first phase in creating a larger financial literacy landscape in the state, and their hope is to extend lessons to classes. medium and elementary. Education, says Magaziner, will make a special difference in Rhode Island.
“We have a large and continuing immigrant population, students who are learning English. We have one of the highest poverty rates in the Northeast. Financial education is not a panacea, it is not a panacea, but it is an important part of the puzzle of how we solve these inequalities and correct them.