LANSING — Last month, Governor Gretchen Whitmer signed into law Bill 5190, requiring high school students in public schools to take a financial literacy course.
The legislation adds a half-credit personal finance course as a requirement for high school graduation, beginning with ninth graders in 2024. The bill, designed to prepare young Michiganders for the future and take control of their finances, was sponsored by State Rep. Diana Farrington, R-Utica.
“Personal finance education will serve as a launch pad for Michigan graduates entering adulthood, so that they are not caught off guard by the financial decisions that await them,” Farrington said in a prepared statement. . “The course will teach students how to manage their finances. They will be ready to make smart budget choices every day and equipped to meet the challenges that come their way. Establishing a core class dedicated to financial literacy has been a years-long labor of love for me, and I’m truly excited for the students who will soar to new heights through a fuller and richer education.
The course requirement could meet half a credit of the four-credit math requirement, the two-credit non-English language requirement, or the one-credit visual arts requirement, the show or applied. The course may also be completed as part of an approved vocational and technical training program. Students from all backgrounds will benefit from expanded instruction in financial literacy.
According to Anita Fox, director of Michigan’s Department of Insurance and Financial Services, the bill “will help ensure that our state gives students the foundation they need to achieve their personal and professional goals.”
“Financial literacy education is something every senior graduate should have a basic understanding of,” Ruthann Varosi, assistant vice president of marketing at Extra Credit Union, told Warren. She said with the new class requirement: “We can prepare the kids before they graduate.”
For many years, ECU has worked with local districts to implement financial literacy education programs. When young adults go out into the world, they don’t always know how to budget their money or how to improve their credit scores. These are areas in which ECU works with teachers and students.
“A financial literacy education is all about empowering young people to choose their financial future,” Varosi said. “One of the key things we like to emphasize to kids in schools is budgeting. Students need to think about what kind of life they want to lead and how much money they are going to spend on it.”
For example, “They don’t think about the long-term effect of a $10,000 loan for a car. They don’t know how they’re going to pay for the car,” Varosi said.
Students should also learn the importance of paying bills on time and the factors that make up individual credit scores. How to get a loan is another serious topic young people should know about. The new class requirement will cover these areas.
One program that has been popular with staff and students is the Banzai Financial Education online program. The program is set up so students can get their own accounts and work on real-life based assignments.
Banzai, headquartered in Provo, Utah, is designed to give students the skills they need to manage a budget once they start living on their own. This allows them to practice managing their money through a variety of skills, including personal financial management, budgeting, and borrowing.
Teachers can track and record their progress remotely. Students get a certificate after completing the program and receive $25 for an ECU account. The program, which includes games, lasts two to three hours and is integrated into the lesson plan.
“It would be a fantastic way to bring that into the classroom and meet the (new) demands,” Varosi said. “He is free to bring us in and advise you.”