CFED Assets & Opportunity Scorecard
Today’s financial world is increasingly complex, and families are forced to navigate a diverse selection of financial products and services. Such complexity raises questions regarding consumers’ financial capability—their ability to manage resources and to make effective financial decisions. Financial capability can be as important a determinant of an individual’s long-term financial security as his or her income, health, and education. From knowing how to create and manage a household budget, to learning how to invest money for retirement or planning to start a business, financial capability is essential to a family’s ability to build and protect assets. Ensuring that children receive financial education in school is one way that states can help the next generation achieve a life that is financially stable and secure.
In order to improve financial capability later in life, states can integrate financial education into K-12 education in a way that ensures students receive instruction. According to a recent report by Champlain College’s Center for Financial Literacy, a strong state policy is one that either requires students to take a stand-alone personal finance course in order to graduate or imbeds personal finance topics within another mandatory course and tests their knowledge on those topics.
Strength of State Policies: Financial Education in Schools
|Does state require students to take a high school course that includes personal finance or to be tested on personal finance? 1|
|State||Adequate requirement for personal finance education?||State requirement?|
|Alabama||High school course required to be taken|
|Arizona||High school course required to be taken|
|Colorado||Student testing required|
|Delaware||Student testing required|
|District of Columbia 2||—|
|Florida||High school course required to be taken|
|Georgia||High school course required to be taken & student testing required|
|Idaho||High school course required to be taken|
|Louisiana||High school course required to be taken|
|Michigan||Student testing required|
|Missouri||High school course required to be taken & student testing required|
|New Hampshire||High school course required to be taken|
|New Jersey 4||High school course required to be taken|
|North Carolina||High school course required to be taken|
|North Dakota||High school course required to be taken|
|Oklahoma||High school course required to be taken|
|South Carolina 5||—|
|Tennessee||High school course required to be taken|
|Texas||High school course required to be taken & student testing required|
|Utah||High school course required to be taken|
|Virginia||High school course required to be taken|
|West Virginia 6||High school course required to be taken|
Notes on the Data
1. "Survey of the States: Economic and Personal Finance in Our Nation's Schools." Council for Economic Education. Accessed Sept. 15, 2015. States receive credit if they require a high school course that covers personal finance to be taken or testing that includes personal finance.
2. Although DC requires testing of personal finance topics, it has not established guidelines as to what topics should be covered.
3. Kansas requires its Board of Education to develop materials and guidelines for local school boards to use in implementing a program on personal finance topics within existing curriculum.
4. New Jersey requires schools to introduce students to personal finance either through a separate course or by integrating the material into other coursework. However, the state allows schools to implement their own curriculum and does not require specific testing of personal finance if schools elect to integrate.
5. South Carolina requires its Board of Education to develop materials and guidelines for local school boards to use in implementing a program on personal finance topics within existing curriculum.
6. In West Virginia, personal finance education is provided within a social studies/economics required high school course called Civics for the 21st Century. However, the state does not require specific testing of personal finance topics.
How States Are Assessed
States receive credit if they require students to take a high school course that includes personal finance or to be tested on personal finance.
What States Have Done
The landscape of financial education is changing rapidly. In the last three years alone, twenty-four states have enacted legislation or adopted resolutions regarding financial literacy, and in 2014, twenty-eight states have introduced legislation concerning financial literacy or financial education. Currently, twenty-one states have adequate personal finance education requirements, with seventeen states requiring students to take a high school course that includes personal finance topics, and six states requiring testing of personal finance topics.
Making the Case
Since 2007, CFED has provided tips to help advocates build a campaign to advance asset-building policies. Although the specific policies featured in the Scorecard have changed over the years, the strategies discussed in this section are still applicable and can be used to make the case for a number of related policies.
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.
Since 2007, CFED has provided case studies that capture detailed stories of noteworthy state policy changes. Although the specific policies featured in the Scorecard have changed over the years, these case studies still serve as instructive lessons drawn from both policy victories and defeats.
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.
Organizations and Experts:
- 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
- Center for Financial Literacy
Guides, Briefs and Papers:
- "Policy Brief: Financial Education in Schools," CFED, October 2012.
- Pelletier, John, "2013 National Report Card on State Efforts to Improve Financial Literacy in High Schools," Champlain College Center for Financial Literacy, Summer 2013.
- •“Survey of the States,” Council for Economic Education, 2014.
CFED thanks Elizabeth Healy and Christopher Caltabiano from the Council for Economic Education and John Pelletier at Champlain College for their input and expertise on this policy issue.