Last week, the House Public Education committee heard Rep. Marsha Farney’s bill (HB 2662) to create a semester-long personal financial literacy course required for high school graduation and I provided testimony in support of this bill. A stand-alone personal financial literacy (PFL) course in high school would better equip Texas students with real-world skills that are so important to becoming financially secure.
How do we currently teach PFL to our students?
The 2011 Legislature enacted a new requirement for K -8 math classes to include instruction on personal financial literacy, effective for the 2014-15 school year. Students also receive PFL instruction in their 12th grade economics course. While it’s great our state has these requirements, our weak spot is clearly in high school. The proposed semester-long course, currently proposed as a social studies course, is important because it would expand PFL instruction in high school, which is taught too little and too late in 12th grade economics, and build upon and reinforce PFL concepts taught in K-8 math classes.
The Great Recession has demonstrated the importance of strong financial management skills. However, too many young adults lack a sufficient grasp of financial concepts. One survey found that only 48% of high school seniors know that paying the minimum balance on a credit card results in higher finance charges than paying the balance off in full. Texas also fares poorly on the financial health of our residents. The CFED Scorecard ranks Texas in the bottom ten states on a variety of financial health measures including the following:
- 65 percent of Texas residents have subprime credit scores;
- 37 percent of Texas residents do not have a savings account;
- Less than 40 percent of Texas workers participate in a retirement plan at work; and,
- 16 percent of Texas borrowers entering repayment on their student loans defaulted during the first three years of repayment
While there’s some uncertainty about where and when this course would best fit into the high school curriculum (whether as a social studies, math or career course), in part because the legislature is currently considering changes to Texas’ high school graduation requirements, Rep. Farney seems open to working with her colleagues to find the best spot in the curriculum for this course once there’s more certainty about the high school graduation requirements. Regardless of where this semester course best fits into the high school curriculum, a stand-alone PFL course in high school is an important addition to the high school curriculum and could go a long way in helping our students build brighter financial futures.