Call it a silver lining of the financial crisis that led to government bailouts, a mortgage crisis and a deep look at how Americans spend and borrow – the economic turmoil makes promoting the importance of financial literacy for schoolchildren a whole lot easier.
“The level of life-altering consequences for making even honest financial mistakes has drastically risen,” said Jim Hedemark, director of the JumpStart Rhode Island Coalition, which advocates for financial-literacy education.
But while the need has only grown greater, Hedemark said few school districts have made significant progress in requiring students to learn the basics of checking accounts, borrowing and budgeting. A 2008 study done by the coalition found that about 5 percent of Rhode Island students participate in an elective dedicated to personal financial literacy.
Hedemark and school administrators said that based on anecdotal accounts that number has likely changed little since then. Hedemark said he knows of just two districts – Chariho Regional School District and Westerly – that explicitly require financial literacy as a graduation requirement.
School administrators say it is not for a lack of want.
“There’s only a given supply of classroom time and right now, even given the economic climate, the demand isn’t there to the extent that people are ready to set aside other things,” North Kingstown Superintendent Phil Auger said.
Districts already must comply with state mandates that students meet standards in physical education, health, English and mathematics. Students with dreams of college often take honors or foreign-language courses to strengthen their applications. Students with a passion for art will take band or chorus all four years of high school. All that leaves little time for an extra course.
Add in concerns about paying for new classes and freeing up faculty to teach them and personal financial literacy quickly falls by the wayside.
“I don’t know what I would say could go away to make room for it,” Auger said. “As soon as I suggested something I would have a war on my hands.”
In 2008, the General Assembly passed a resolution urging the R.I. Department of Education to mandate financial-literacy standards and form a task force with JumpStart to establish a statewide strategy for increasing middle school and high school students’ knowledge in the area.
None of that happened. Department spokesman Elliot Krieger said education officials don’t want to overburden districts by laying on more requirements.
“It’s something we support but we do tend to give districts a lot of latitude in how they approach this,” he said.
Department officials are, however, looking at incorporating fiscal literacy into statewide social studies standards, expected to be released in 2013 and replace civic-education standards.
In the meantime, the department has posted information about fiscal literacy on its website and pointed school districts to curriculum models developed by others.
Some businesses and business organizations are also attempting to nudge school districts toward incorporating more fiscal literacy in the classroom.
The New England Collectors Association, a wing of the Association of Credit and Collection Professionals, has long argued that fiscal literacy should be on par with English and other traditional subjects.
“We always warn our kids about drugs and alcohol, which maybe a small minority abuse, yet we all engage in financial transactions and we place very little emphasis on that,” New England association President David Sands said.
Sands, a Bay State collections professional, said educated consumers better contribute to the world around them. They avoid big debts that hurt both them and the businesses that sold to them.
Other industries say financial literacy is important to their very survival. BankNewport sends executives into schools to hold workshops and speak with students. Students have also headed to branches for tours and talks. Bank Vice President of Community Relations Kathleen Charbonneau said some of those students may end up as bank employees issuing loans and handling customer accounts.
Some districts are listening. Hedemark said that with the poor economy looming in the background, administrators appear more willing to find ways to offer financial literacy. In the past, many would simply dismiss the idea because of limited time and resources.
“I’ve seen a massive shift in policymaker philosophy from just saying we don’t have time to more extensive conversations,” Hedemark said.
Chariho has been on the cutting edge. A few years ago, Chariho High School won a grant to outfit a classroom with a stock ticker and all the tools for learning about finance and business.
The school requires that all students either take a semester-long personal-finance class or complete a rigorous online course. Principal Robert Mitchell said most students opt for the classroom course.
Chariho put in the requirements just before the economy crashed in the fall of 2008. It came after strong urging by business teachers and with strong backing by administrators.
But Mitchell said there is room for Chariho and other districts to do far more.
“We need to do more not only as a school but as a state and as a country to provide students with these important financial-literacy skills,” he said. “If there’s any doubt, just look at the current state of the economy.” •
