About 125,000 students will graduate from Pennsylvania public high schools in 2023, and most of them will head to the workforce or college with scant knowledge of personal finance. According to Next Gen Personal Finance’s State of Financial Education Report for 2022, only one in seven Pennsylvania students will take a personal finance course before graduating.
Of the state’s 500 school districts, fewer than 50 require one-semester classes on personal financial management as a graduation requirement. Small wonder, then, that the Financial Industry Regulatory Authority’s national financial capability study in 2018 found that 67% of Pennsylvanians failed to answer correctly more than three of five basic questions on financial literacy.
The problem is not unique to Pennsylvania, but the commonwealth has not yet joined other states that require financial literacy instruction as a graduation requirement. Nationally, financial problems are a leading cause of stress, divorce, suicide and other societal problems, and 54% of U.S. households spend more than they earn each year.
According to the Next Gen report, eight states — Alabama, Missouri, Mississippi, Iowa, North Carolina, Utah, Tennessee and Virginia — require a semester of personal financial instruction as a graduation requirement. Seven other states — Florida, Nebraska, Rhode Island, Ohio, Georgia, Michigan and South Carolina — have committed to such a requirement.
Personal financial literacy is more important than ever for students because modern technology has made it easier than ever for them to get into financial trouble.
States that teach financial literacy instruct students on how interest on credit cards and other borrowing accelerates debt, the value of long-term tax-deferred retirement savings, and other basics. But it also warns them of the dangers of online sports gambling, wildly speculative online schemes masquerading as investments, and more.
This week the state Senate passed a bill sponsored by Republican state Sen. Chris Gebhard of Lebanon that would mandate a half semester of personal financial literacy education for all Pennsylvania high school students, based on standards established by the Council for Economics Education.
The House should pass the bill to prepare students for the financial realities of independence.
— The Citizens’ Voice, Wilkes-Barre via TNS
