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  • Writer's pictureJoanne Jacobs

Neither a borrower nor a lender be: States add 'financial lit' mandates



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.



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.

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21件のコメント


David
David
2023年12月28日

The problem is that these classes should be built into the math classes already. However, students are forced to learn items like slope or y=mx + b. Put real world math into the math classes instead of stuff most students will never use.

いいね!
m_t_anderson
2023年12月30日
返信先

That's what we get when we let college grads who suck at math get teaching credentials. Degrees of freedom takes one or two lessons to learn the rules of thumb, and will get you through all the basic stuff in an Excel spreadsheet. No one in his right mind has confidence in confidence intervals, but very few high school teachers can explain them sufficiently so you know they're just a measurement of precision (NOT accuracy), and certainly not anything to have CONFIDENCE in.

いいね!

humphrey
2023年12月28日

How are they going to make it through the formula for compound interest if they don't understand fractions and exponents and the use of letters as variables?

いいね!

Steve Sherman
Steve Sherman
2023年12月28日

Another example where the schools which can't do what they're supposed to do but feel inclined to do something of dubious value. Explain to them the actual cost of buying a new car which is completely financed and then gets whacked with a 10% sales tax and then is broken down to 60 monthly payments. No money Down !!!!

いいね!
superdestroyer
1月02日
返信先

This is what makes teaching personal finance hard. Someone brings up an anecdote and thinks that the anecdotes trumps everything.

Everyone cannot purchase an used car because someone has to purchase a new car to create teh used car market. Also, if one purchases a new car, one will get, on average, two more years of use out of it than an used car.

いいね!

superdestroyer
2023年12月28日

These classes are usually so behind the times to be idiotic. And the assumptions that students are required to make is also ridiculous. And no class is going to discuss that amount of material support that so many upper middle class families give to their adult children after finishing college.

いいね!
superdestroyer
1月02日
返信先

Personal knowledge should also be handed down to students. I used to point out to STEM students who were thinking about Defense or three letter agencies, that most of those agencies are what can be called early, early organizations. The Pentagons normal work day starts before 07:00 AM but few meetings occur after 03:00 PM (1500) due to people leaving to catch their car pools, commuter buses, or slug lines.

いいね!
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