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Seven years after students at a small suburban high school in Rhode Island successfully advocated for the adoption of financial literacy standards, state lawmakers made proficiency in personal finance a requirement for college. graduation from high school, beginning with the class of 2024.
Signed by Gov. Dan McKee on June 1, the law creates a Dec. 31 deadline to develop and approve state-specific consumer education and personal finance standards. At the start of the 2022-23 school year, all public high schools in Rhode Island must offer a standard-compliant course.
“It’s very aggressive to get these standards in place and to make them work within the timelines we have set, but we know it’s really necessary,” said state education commissioner Angélica Infante. -Green. On average, Rhode Island graduates have the second highest student loan debt of any state, at $36,193.
After meeting with students across the state who felt they weren’t ready to go to college and considering the impact of the pandemic on student engagement, the commissioner told 74 that this moment was the moment to solidify what they had been building for years.
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“[Students] felt like it was something they were wronged [on]. We have therefore made it our duty to move this program forward.
Rhode Island approved the National Council on Economic Education’s standards in 2014. On average, only about 5% of students in Rhode Island receive training in financial literacy, according to the state Department of Education, being given that schools could choose whether or not to adopt the programs.
Last year, Saloni Jain senior took a personal finance course in a hybrid learning setup, with three days of online learning, at suburban East Greenwich High School. She said the mock lessons, like making mock TurboTax returns and creating a budget spreadsheet, kept her engaged during virtual learning.
“We were getting paychecks – how do we put that money into a 401(k) and pay all our bills and pay off our credit card or student loan debt? It was really helpful in visualizing, you know, how we might live in the future,” Jain said. “It was only a one-semester course, but honestly it changed my thinking a lot.”
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Nationally, 21 other states have a version of the financial literacy standards, which can be incorporated into math or civics lessons, although only seven require a full semester stand-alone course be completed before graduation.
In 2021, more than 25 states have introduced bills strengthening personal finance education. Proponents argue that literacy is key to breaking cycles of poverty, especially as the younger generation grapples with the economic fallout from the pandemic. When loans, budgeting, and debt management are explicitly explored during the school day, young people are exposed to life-changing information as they move into adulthood.
A 2018 study by researchers at Montana State University showed that financial literacy requirements lead to lower credit card and high-interest student loan balances for low-income college students, as well than a reduction in private loans for high-income students. Working-class and lower-class students who took financial literacy courses were also able to work less while in college, which could encourage perseverance and college graduation. Expanding access to personal finance courses can help narrow racial wealth gaps and support homeownership down the line.
Even within states considered to have the highest standards and requirements, students are seeking more real-world connections to prepare for the future. Whitman Ochiai, who recently graduated from high school in Alexandria, Va., described his required course as “broader than it was deep.”
Left wondering about retirement decisions, building a balanced budget, and the intuition behind big purchases, he started the MoneyEd podcast in 2019 to explore these topics. He said there has been increased interest throughout the pandemic, likely with more students working and families facing economic uncertainty.
“Often the only people who have access to this information are those who would have had access to it anyway,” Ochiai said. “Especially for college students and first-generation students, as well as parents who may not be homeowners, this is a pathway for them to gain a deeper understanding of finance.”
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Some Rhode Island teachers have created electives in their schools in recent years, heeding student desires and seeing how financial literacy can connect with hard-to-grasp concepts like compound interest. Before now though, funding and implementation were left to teachers or schools.
Samantha Desmarais teaches math, financial literacy and computer science at Central Falls High School, which serves mostly low-income Latino and black students in a working-class town just north of Providence. She hopes the legislation will open the door to state financial support for accreditation and hiring, thereby building capacity to teach the subject.
Otherwise, she said, “there will be a disproportion between districts that are able to work around their budgets or staff and make it work, and districts that are weighted down by all these other things.”
Desmarais teaches approximately three finance sections per year; enrollment is still higher even with elective status, at around 25-30 students per class. This fall, she will also teach a section for language learners, which introduces students to American monetary and credit systems.
“If you like learning something today, spread this news and talk about it with your friends. There’s no reason talking about money should be such a taboo subject,” she tells her students.
Proponents say personal finance education offers students an opportunity to break down biases about money conversations before embarking on big financial decisions, like student loans, car ownership and debt credit card. Lessons learned can also come home and support families facing economic challenges.
“I view the state’s implementation of this financial education guarantee as sort of a gateway to meaningful engagement with families,” said Pat Page, vice president of the personal finance coalition Rhode Island JumpStart and business educator.
Page, a former Rhode Island teacher of the year, has been a strong advocate for broader financial education for years and was one of the first in the state to teach a standalone course. She has helped students, including Sunny Sait, testify for broader financial education before the state legislature – in 2014, 2019, and again in 2021.
Although Sait took Page’s course two years ago, he said he still uses the concepts on a daily basis. Currently on a gap year after graduating this spring, he’s opened a Roth IRA and is budgeting his internship pay to ensure he can still afford the things he loves, like karate.
“My mindset has definitely changed a bit from thinking of money in terms of things, to thinking of money more as a means of growth, saving and investing. I’ve really changed my mindset. orientation, moving from buying, like being a consumer, to becoming an investor.”
Many describe the effort to make financial literacy a reality for all Rhode Islanders as both a grassroots and grassroots effort, driven by students and teachers, but also state leaders, like the Treasurer. Seth Magaziner, who helped introduce the legislation.
“The strongest advocates who worked very hard to get this bill passed were teachers and students. Students who really wanted it taught and teachers who are willing to teach it,” said Magaziner, who began his career as an elementary school teacher and recently announced his candidacy for governor.
The Treasurer and Commissioner of Education both view signing the law as the first phase in creating a broader financial literacy landscape in the state – their hope is to expand courses at the middle and lower levels. elementary. Education, Magaziner says, will make a particular difference in Rhode Island.
“We have a large ongoing immigrant population, students learning English. We have one of the highest poverty rates in the northeast. Financial education is not a panacea, it is not a panacea, but it is an important part of the puzzle to solving these inequalities and correcting them.
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