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When you were in middle or high school, did you learn money basics? Did you take a personal finance class? If so, you were among the less than half of Americans who did. Today, only 17 states require high school students to take a personal finance class before they graduate, and only about six test students on what they’ve learned.
As April was National Financial Capability Month, it was the perfect time for the Department to turn its attention to financial literacy for youth and what it could do to promote best practices and support a network of policymakers and practitioners across the country
The Department, in partnership with the Financial Literacy and Education Commission (FLEC), organized a special convening entitled “Financial Education in America’s Schools.” The goal was to engage the education community, local and state stakeholders, financial institutions and others in building strong, permanent partnerships that immerse youth in financial concepts.
In addition, the Department encouraged states to participate in the Programme for International Student Assessment (PISA), an international survey administered to 15-year-olds that includes a component on financial literacy. PISA results for 2015 showed that students who had a bank account scored higher than their peers who didn’t have one.
The daylong program, held in the Department’s Barnard Auditorium, brought together financial experts; researchers, both inside and outside the Department; elected officials; community stakeholders; and others from across the country to discuss ways to improve students’ financial IQ. All told, nine federal agencies, 11 states, and dozens of national organizations participated in the convening.
The event opened with welcome remarks from Secretary DeVos and U.S. Department of the Treasury Treasurer Jovita Carranza. Among the topics discussed were ways that state and local stakeholders could work together with financial institutions, non-profits and others to create safe, low-cost banking and savings opportunities for students, including economically vulnerable populations such as foster youths, justice-involved youths and youths in military families. For students preparing for college, topics focused on ways to help them and their parents evaluate higher education financing options and available partnership opportunities to help inform and simplify postsecondary decision making. In addition, attendees addressed ways to engage state and local stakeholders, community organizations, financial institutions and others in creating youth employment opportunities through job pathways, internships and apprenticeships, as well as collaborative ways to support age-appropriate entrepreneurship education and connections to supportive resources.
Teaching students how to make smart decisions about money from an early age will help ensure that they make informed decisions about pursuing and paying for college, and planning for their future. Secretary DeVos encouraged schools, communities and stakeholders to find ways to take on the challenge of youth financial literacy, and to look to community partners for support.
Bottom line: Youth need to know how to budget, manage money and pay bills. Across the country, states like Tennessee, Florida, Colorado, Kentucky and Wisconsin have recognized the importance of teaching young people sound money management practices. The need for youth financial education and savings programs is well-documented. According to Youth.gov, many youth are ill-equipped to make sound financial decision because they have not received either formal or informal guidance on financial matters, and parents often fail to talk about money with their children.
To learn more, the Department’s Homeroom Blog has several posts, along with resources, that address the importance of financial literacy for students and their parents.