Study: Most states don’t score well on financial literacy

FAIRFAX, VA - JANUARY 23: Bryan Lee, 14, left, of Alexandria, takes notes as he looks at stock numbers. Eighth graders in Fairfax participate in a financial literacy program where they attend the Junior Achievement Financial Academy, run in partnership with Capital One Bank. At the academy, the students are given real-life exercises about mortgages, paying bills, applying for credit. On this day students from Holmes Middle School attend the academy. (Photo by Sarah L. Voisin/The Washington Post) Bryan Lee, 14, left, of Alexandria takes notes Jan. 23, 2013, as he looks at stock numbers with other eighth-graders from Holmes Middle School. The students were participating in a financial literacy program at Junior Achievement Finance Park.  (Sarah L. Voisin/The Washington Post)

Given the extraordinary amount of debt that Americans wallow in daily, you’d think that teaching financial literacy in school and at home would be a priority. Guess again. A new study on the state of financial literacy programs in public schools ranks only 7 states with an A and 22 with a D or F. And it says that parents are no more comfortable talking to their kids about sex than they are about money, so young people aren’t learning about the subject at home, either.

The study, which you can find here, was done by the Center for Financial Literacy at Champlain College, which assigned grades to states for the quality of their financial literacy programs. It says in part:

We would not allow a young person to get in the driver’s seat of a car without requiring drivers education, and yet we allow our youth to enter the complex financial world often without any related education. An uneducated individual armed with a credit card, a student loan and access to a mortgage can be nearly as dangerous to themselves and their community as a person with no training behind the wheel of a car. Here are a few sobering facts:

* The most recent Jump$tart Coalition survey shows high-school seniors failing on personal-finance tests.

The teaching of personal finance is often an afterthought because it is not a subject that students are required to be tested on in most states.

* Our children are also not learning these important life skills at home. Another study showed that parents are nearly as comfortable talking to their children about sex as they are discussing money. Really? The “sex talk” with your child is nearly as difficult to have as a conversation about spending, saving, and the use of credit?

States were graded by the Center for Financial Literacy through comparisons of high school data; there is no national effort to track elementary and middle school or college data on this subject.

Here’s how the grading breaks down:

A– The state requires a standalone personal finance course. Alternatively, the state requires that personal finance topics be taught as part of  another mandatory course and that students’ personal finance knowledge be assessed.

B-The state mandates personal finance education as part of another course offering, but requires no assessment. In some cases, there may be a math course that includes a partial assessment of personal finance knowledge.

C-The state requires that a personal finance elective course be offered or that personal finance topics be taught, but there is no accountability: No one checks to see if personal finance is being integrated into a course, and no specific course is designated as the delivery mechanism. Students are not assessed on these topics.

D-The state allows schools to teach personal finance as an elective, but study is not required for graduation.

F-The state has few requirements, or none at all, for personal finance education in high school.

States that earned an A Grade (7 States or 14%)
Georgia, Idaho, Louisiana, Missouri, Tennessee, Utah and Virginia.

States that earned a B (13 states or 26%)
Arizona, Colorado, Illinois, Kansas, New Hampshire, New Jersey, New York, North Carolina, Ohio, South Carolina, South Dakota, Texas and West Virginia.

States that earned a C (8 states or 16%)
Indiana, Iowa, Kentucky, Mississippi, Nevada, New Mexico, Oklahoma and Wisconsin.

States that earned a D (11 states or 22%)
Florida, Maine, Maryland, Michigan, Minnesota, Montana, North Dakota, Oregon, Pennsylvania, Vermont and Wyoming.

States that earned an F (11 states or 22%)
Alabama, Alaska, Arkansas, California, Connecticut, Delaware, Hawaii, Massachusetts, Nebraska, Rhode Island and Washington.

Valerie Strauss covers education and runs The Answer Sheet blog.

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