The recent financial crisis and Great Recession that affected so many homeowners and retirees made it obvious why people need to know how to handle their finances. With student loan debt now rising past $1 trillion, threatening to hobble young people financially and slow economic recovery, the need for financial literacy is all the more pressing.
Pennsylvania ranks third in the nation in student debt, according to the Project on Student Debt. Over 70 percent of our college students graduate with more than $30,000 in student loans that must be repaid beginning as early as six months after graduation.
Our young adults are not prepared to enter today’s increasingly complicated financial world. While most parents say they talk to their kids about money, over 40 percent give themselves a C, D or F on their own knowledge and would like some help, according to a 2014 survey by the National Foundation for Credit Counseling.
Most parents want their children to learn money-management skills in schools so they are able to make informed decisions about saving, spending, investing and protecting their money without having to learn from the “School of Hard Knocks” as many of us adults did. In fact, high school teachers in school districts with a required personal-finance course say their students tell them that parents are quizzing them so that they can learn, too.
Last year, a Pennsylvania task force on financial education submitted a report and four recommendations to the governor and General Assembly on how to better teach personal finance in schools. Act 104 of 2010 mandated the task force, which I chaired, to examine the needs and trends of financial education in the commonwealth’s K-12 school districts and to study how funding might be provided for improving those efforts.
We found there are a growing number of school districts in Pennsylvania (close to 50) that have addressed community concerns and now require high school students to take a personal-finance course before graduation — Belle Vernon, Burrell, Cornell and Riverview school districts are examples in Allegheny and Westmoreland counties. One thing all these districts have in common is that they took advantage of the many free and low-cost classroom resources available without their having to purchase expensive textbooks.
At the state level, actions that go beyond proclamations — April is Financial Education Month nationwide and here in Pennsylvania — are needed to address the recommendations of the task force. While legislation (House Bill 1839) has been introduced by Rep. Dom Costa, D-Stanton Heights, along with bipartisan co-sponsorship concerning two of the recommendations, much work remains to be done for this to pass both legislative chambers.
Sadly, Pennsylvania once led the nation in financial-literacy efforts and was one of two states that had a standalone Office of Financial Education dedicated to providing free curricula and teacher training. Funded by licensing and regulatory fees from banks and other financial and nondepository institutions, and using no taxpayer dollars, the office was housed in the Department of Banking and Securities until its elimination from state government in 2011.
What can you do to help our young people become more financially literate?
Start by contacting your local school administrators and school board members to ensure that every student in your district receives personal-finance instruction.
Secondly, send an email to your state representatives and Gov. Tom Corbett letting them know you support financial education in schools and would like to see the state fund those efforts.
Finally, learn more about how you can educate yourself by visiting the Pennsylvania Jump$tart Coalition for Personal Financial Literacy website at www.pajumpstart.org. More than 35 organizations and individuals are members of this all-volunteer, nonprofit group dedicated to improving financial literacy for youth.
With support by parents and action at the state and local levels, maybe next April we can go beyond proclaiming Financial Education Month and actually provide adequate financial education here in Pennsylvania.
Mary Rosenkrans is a former director of the Pennsylvania Office of Financial Education and served as chair of the Pennsylvania Task Force on Economic Education and Personal Financial Literacy Education. The task force report can be found at www.education.state.pa.us.