Should I borrow to pay tuition at a private college? How much will that car loan really cost? How do I write a budget?
Wisconsin will require students to pass a financial literacy class covering "money management, saving and investing and credit and debt" to collect a high school diploma starting with the class of '28, reports Margaret Faust for Wisconsin Public Radio. Previously, schools were supposed to embed the content in other courses. The bill had bipartisan support.
A new Pennsylvania law will require high schools to offer financial literacy.
As young people prepare for the world beyond high school, more states are requiring "financial literacy" courses, reports Ann Carrns in the New York Times.
Only seven states now require a semester of financial literacy, according to the 2023 “report card” from the Center for Financial Literacy at Champlain College in Vermont. However, the number is growing rapidly. By 2028, financial literacy will be required in 23 states.
Pandemic shocks -- many families have little savings in case of emergencies -- and high inflation have increased the demand for financial preparation, says John Pelletier, who directs the Champlain center. So has news of student loan defaults.
Stand-alone classes are effective, says Carly Urban, a professor of economics at Montana State University. High school financial instruction “overwhelmingly” improves credit scores, lowers loan delinquency rates and reduces the use of high-interest lending, her research shows. "It also leads more students to low-interest college financing and away from high-interest loans, and increases repayment rates for first-generation students and those from low-income families," reports Carrns.
I'm dubious about adding graduation requirements that aren't absolutely essential. (My state, California gets an "F" on financial literacy with no required instruction, but has passed an "ethnic studies" mandate.) However, I concede that teenagers would benefit from understanding how to budget, borrow wisely, save and assess risks.
Here's a short personal finance quiz from the Council for Economic Education. I scored 100 percent, but I'm old and I've been around the block a few times.