CFED Assets & Opportunity Scorecard
Financial Education in Schools
Financial capability – the ability to make informed judgments and effective decisions about money management – can be as important a determinant of an individual’s long-term financial security as his or her income, health and education. From understanding the meaning of one’s credit score to possessing the necessary skills to balance a checkbook, financial capability is essential to a family’s ability to build and protect assets. States should ensure that students receive quality instruction in key personal financial concepts. Among other policy measures, states can mandate that students complete a course in personal finance as a condition of graduation; develop content standards for personal finance curricula; and require testing in key personal finance topics.
CFED evaluated the strength of each state’s policies related to financial education for K-12 students against the four criteria described in the Elements of a Strong Policy tab. The following table shows which criteria each state met.
CFED uses the following icons to denote the strength of state policies:
Strength of State Policies: Financial Education in Schools 1
|State||Does the state require students to take a personal finance course? 2||Does the state have content standards for personal finance courses?||Does the state require schools to implement content standards for personal finance? 3||Does the state require the testing of student knowledge in personal finance?||Rating|
|District of Columbia||No||No||No||No|
1. "Survey of the States: Economic, Personal Finance & Entrepreneurship Education in Our Nation's Schools in 2011," New York: Council for Economic Education, www.councilforeconed.org/wp/wp-content/uploads/2011/11/2011-Survey-of-the-States.pdf. (Accessed 7/24/2012).
2. Includes personal finance as part of an economics course.
3. States can create curriculum standards, but they may lack the authority to enforce school district (or relevant local jurisdiction) implementation.
4. Massachusetts passed a bill in 2012 establishing a 3 year competitive grant program for 10 public high schools to include financial education in their curricula.
5. Although Oklahoma's Passport to Financial Literacy Act of 2007 requires students to complete instruction in 14 areas of personal finance in order to graduate from a public high school, the roll-out of this requirement for all grades (7-12) will not be complete until the 2013-2014 school year.
6. In April 2012, the Texas State Board of Education approved new mathematics standards that will require testing of student knowledge in personal finance. These standards will be implemented in 2014, upon the completion of required textbook updates.
WHAT STATES CAN DO
A growing number of states now recognize the connection between financial capability later in life and integrating financial education into state curricula. States can determine the quantity and quality of the financial education students receive through a variety of policy options. Most effectively, states can explicitly mandate that high school students complete a stand-alone course in personal finance. Alternatively, states can direct school districts to include personal finance in the curriculum of other courses (such as economics or math classes) required for graduation. As an incremental step, states can require schools to offer an elective course in personal finance, but stop short of making it a condition of graduation.
WHAT STATES HAVE DONE
Thirteen states now require students to pass a personal finance course (or an economics course that embeds personal finance curriculum) as a condition of graduation, showing no growth from 2009 to 2011 (though up historically, from seven states in 2007 and one in 1998). Five states now require testing in basic financial
concepts as a condition of graduation - four less than in 2009. Forty-six states now include personal finance in their curriculum standards – more than double the number that did so in the late 1990s, when only 21 states possessed content standards for financial education.1
1“Survey of the States 2011,” Council for Economic Education, http://www.councilforeconed.org/news-information/survey-of-the-states/ (Released March 12, 2012; Accessed July 24, 2012).
ELEMENTS OF A STRONG POLICY
Based on research by the Council for Economic Education, CFED considers a state’s financial education policy strong if it meets the following criteria:
1. Does the state require students to take a personal finance course? States should mandate that students take and complete a course in personal finance as a condition of graduation.
2. Does the state have content standards for personal finance courses? States should include personal finance in K-12 curriculum standards to ensure that students are meeting basic standards, objectives and proficiencies in classroom instruction.
3. Does the state require schools to implement content standards for personal finance? Even if states include personal finance in curriculum standards, local school districts are not necessarily required to implement those standards in the classroom. As school districts often confront competing curriculum priorities, they may choose to implement some, but not all, standards. Requiring school districts to implement personal finance content standards ensures that the intention of state policy is carried out.
4. Does the state require the testing of student knowledge in personal finance? Just as with math and reading, students should be required to demonstrate a basic proficiency in personal finance in order to graduate from high school.
To see how each state’s policy stacks up against these criteria, see the State Data tab above.
MAKING THE CASE
Five Guidelines for a Successful Campaign
1. Build a diverse coalition. Financial education advocacy should include participation by a broad group of representatives from nonprofits, community service providers, asset practitioners and advocates, financial services firms, educators, and city, state and federal government agencies. Organizations and agencies that serve youth are vital, but those that cater to adults and older adults should also have a role in the effort and will reinforce the connection between mandated school curriculum and healthy financial behaviors later in life.
- Be strategic in defining member roles. Across the coalition, each party has its strengths and limitations. Be deliberate in decisions around the role each member plays to maximize the coalition’s capacity and impact. For example, while public agencies cannot coordinate advocacy campaigns or endorse legislation, they can serve as experts to advocates and elected officials. Educators may make the case to their colleagues more effectively than asset advocates.
- Diversify communication methods. Individual coalition members should integrate updates on financial education advocacy in the materials they send out to their own supporters. Exploring non-traditional communication techniques may also be worthwhile. In Massachusetts, youth in a financial education program were filmed talking about their experiences in a promotional video in support of the effort. The video was used to help advocates build campaign support from the policymakers and the field.
2. Think universally, behave collaboratively. There is a temptation for financial education advocates and service providers to create individual curricula, products and teaching programs. Unfortunately, doing so often results in uneven delivery of untested programs in pockets throughout the state and varied content and branding that is confusing or unattractive to learners. It is important for advocates to remember to leave logos at the door and position themselves collectively as the “good guys” in the field. Advocates and service providers should give credible financial information to consumers that is not associated with particular vendors. Find a way to include all of the relevant work that each collaborative partner provides to keep people engaged and to build the strength of the broader group. Use an organizational structure that welcomes engagement and input, yet is disciplined in its messaging. Advocates should work to integrate their individual content into the standard curricula, rather than promoting a free-standing program, to increase scope across the state.
3. Support a broad base of elected leaders. Political support for financial education in schools typically cuts across traditional partisan divisions. In Utah, a bill mandating the completion of a stand-alone financial education course was sponsored by a conservative Republican, while a similar Nevada bill incorporating financial education into other class curricula was sponsored by a group 8 of education-friendly Democrats. State treasurers can also play a key role in building legislative support from both sides of the aisle.
4. Understand the opposition/challenge. Some asset policy issues require broad education, research and a data-driven economic argument. In this case, the argument for students’ financial education is universally accessible and broadly appealing. Most people identify with the need for financial education based on their own experiences or the experiences of someone they know. However, a few data points related to savings rates, debt levels or youth skill level surveys are often effective in moving a key leader from the familiarity of personal stories to a broader societal concern for the next generation. The challenge of advocating for this policy is not the argument for its value, but rather the practicability of its implementation. To make that case, a robust effort on the administrative side is in order.
5. Pursue a parallel administrative strategy. In an era of reduced public funding and standardized test pressures, the implementation of a financial education mandate is challenging. Anticipate the concerns and shape the argument and/or bill accordingly. Advocates should talk to state curriculum developers, teaching colleges, public school teachers, superintendents, union representatives and researchers on legislative committee(s) dealing with education about the specifics of implementation. Many state education departments update their educational frameworks on a rotating basis, from which the standardized tests are composed. Understanding where the state is in its process of framework updates is as important a part of advocacy strategy as meetings with lawmakers. Advocates should provide examples of how financial education could be integrated throughout the curriculum of the next framework (math, social studies, etc.). Teaching colleges and other providers of professional development training should be engaged in the effort to introduce financial capability content to students.
6. Capitalize on opportunities in the public discussion. The current fiscal and economic crises provide an opportunity for the public at large and policymakers in particular to comprehend the importance of financial education in schools. Financial predation typically peaks during difficult economic times or in unregulated marketplaces. Advocates should document these abuses and make the case for consumer education at an early age. State treasurers are often looked to for guidance when capital markets get rough. Treasurers can be pressed to use their media opportunities to talk about the value of children’s financial skills. Lastly, the low-cost of financial education in public schools relative to other state expenditures should be highlighted whenever possible. Legislators are searching for policies to avoid the next economic crises, and few are less costly than integrated K-12 financial education.
For each edition of the Assets & Opportunity Scorecard since 2007, CFED has worked with experts in the field to capture detailed stories of noteworthy state policy changes—both policy victories and instructive defeats. These case studies appear in the Resource Guides for each policy priority.
Advocating for Universal Financial Education in Massachusetts (published October 2011)
In 2009, the Massachusetts Financial Education Collaborative set to work on an array of efforts to better understand and coordinate financial education delivery in the state…Financial capability advocates celebrated an early victory in April of 2011 when Governor Patrick signed H2247, which created an Office of Financial Education within the state Treasury and established a financial capability trust fund to seed financial education efforts throughout the state. Click here to read more.
For a two-page overview of financial education in schools, download CFED’s Policy Brief.
For an in-depth compendium of analysis, research, and resources on financial education in schools, download CFED’s Resource Guide.
- Council for Economic Education
- Jump$tart Coalition for Personal Financial Literacy
- National Endowment for Financial Education
- Aspen Institute Initiative on Financial Security
- Center for Social Development