2023 NATIONAL REPORT CARD | 19
THE CASE FOR HIGH SCHOOL
FINANCIAL LITERACY
Personal finance education in high school provides
students with the knowledge and skills to manage
financial resources effectively for a lifetime of financial
well-being. Here are just some of the reasons our young
people need to learn about personal finance:
• The number of financial decisions an individual
must make continues to increase, and the variety
and complexity of financial products continues
to grow. Young people often do not understand
debit and credit cards, mortgages, banking,
investment and insurance products and services,
payday lending, auto title loans, rent-to-own
products, credit reports, credit scores, etc.
• Many students do not understand that one of the
most important financial decisions they will make
in their lives is choosing whether they should go
to college after high school, and if they decide
to pursue additional education, what field to
specialize in.
• Kids are not learning about personal finance at
home. A 2022 T. Rowe Price Survey noted that
57% of parents have some reluctance about
discussing financial matters with their kids and
37% do not like to talk to their children about
money. This is not surprising; 65% of parents
wished they were more financially savvy, and 54%
indicated that they were not financially prepared
for the pandemic. Three out of four children
indicated that they would go to their parents for
money advice. But they indicated that they would
look to their teachers, siblings, friends, YouTube,
Facebook, Instagram, TikTok, and X (formerly
Twitter) for financial advice as well.
• On a 2018 international financial literacy test of
15-year-olds, the U.S. ranked sixth out of 13 OECD
countries, trailing Estonia, Finland, Canada,
Poland, and Australia, and it was just slightly, but
not statistically, better than Portugal, Latvia, and
Lithuania. That’s four formerly communist nations
that are doing as well or better than the USA—
what a “Sputnik moment.”
• Most college students borrow to finance their
education, yet they often do so without fully
understanding how much debt is appropriate for
their education or the connection between their
area of study and the income level that they can
expect to earn upon graduation. Many students
attend college without understanding financial
aid, loans, debt, credit, inflation, budgeting, and
credit scores.
• At many colleges, financial literacy education is
largely composed of brief, federally mandated
entrance and exit loan counseling for students.
Student feedback indicates that most do not
comprehend the information presented and view
it as one more requirement of the financial aid
process rather than a learning opportunity.
• The 2021 adult survey in the most recent
FINRA Investor Education Foundation’s
Financial Capability Study indicated that just
one in five American adults were offered and
took financial literacy instruction in school,
college, or the workplace. Most adults never get
this education since it is not required instruction.
• Student debt can be very high for some recent
college graduates and large debt variations
exist from state to state. According to a recent
Project on Student Debt study for 2020 four-
year public and private college graduates, these
students left college with average student debt
that ranged from a low of $18,350 in Utah to
a high of $39,950 in New Hampshire. The
percentage of these students graduating with
debt ranged from a low of 39% in Utah to a
high of 73% in South Dakota.
• Employee pension plans have been disappearing
for most private sector workers for decades and
have been replaced by defined contribution
retirement programs, which impose greater
responsibilities on young adults to save and
invest and ultimately spend retirement savings
wisely. If they fail to do this, they could become
a significant economic burden on our society.