Personal finance

All high schools in Rhode Island are now required to offer personal finance

SEven years after students at a small suburban Rhode Island high school successfully advocated for adoption of financial literacy standards, state lawmakers made mastery of personal finance a requirement for education. high school graduation, starting with the class of 2024.

Signed by Governor Dan McKee on June 1, the law sets a December 31 deadline for developing and approving state-specific consumer education and personal finance standards. By the start of the 2022-2023 school year, all public high schools in Rhode Island must offer a standard-compliant course.

“It is very aggressive to put these standards in place within the time frame that we have set, but we know that it is really necessary,” said State Education Commissioner Angélica Infante-Green. On average, Rhode Island graduates have the second highest student loan debt of any state at $ 36,193.

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After meeting with students from across the state who thought they weren’t ready to go to college, and given the impact of the pandemic on student engagement, the commissioner told 74 that now was the time to consolidate what they had been building for years.

“[Students] felt like it was something they were wronged [on]. We have therefore endeavored to move this agenda forward. “

Rhode Island approved the National Council for Economic Education standards in 2014. On average, only about 5% of students in Rhode Island receive financial education, according to the state Department of Education, since schools could choose whether or not to adopt the program.

Last year, Saloni Jain Sr. took a personal finance course in a blended learning setup, with three days of e-learning, at Suburban East Greenwich High School. She said lesson simulations, like making false claims on TurboTax and creating a budget spreadsheet, kept her engaged during virtual learning.

“We were getting paychecks – how do we put that money into a 401 (k) and pay all of our bills and pay off our credit card or student loan debt?” It’s been very helpful in visualizing, you know, how we might live in the future, ”Jain said. “It was just a semester course, but honestly it changed my thinking a lot.”

Related: McAlmont: Financial literacy can’t wait for college. Here are my 2 career preparation wishes so that students give them a head start on success

Nationally, 21 other states have some version of the Financial Literacy Standards, which can be incorporated into math or civics classes, although only seven require a full semester stand-alone course be completed before graduation.

In 2021, more than 25 states introduced bills strengthening personal finance education. Advocates argue that literacy is the key to breaking cycles of poverty, especially as the younger generation grapple with the economic fallout from the pandemic. When loans, budgeting, and debt management are explicitly explored during the school day, young people are exposed to life-changing information as they move into adulthood.

A 2018 study by researchers at Montana State University found that financial literacy degree requirements lead to lower credit card balances and high interest student loan debt for low-income students. , and a decrease in private loans for high income students. Working-class and lower-class students who took financial literacy classes were also able to work less while in college, which could encourage persistence and graduation. Expanding access to personal finance courses can help reduce racial wealth gaps and support homeownership down the line.

Since 2020, 25 more states have proposed or adopted changes to financial literacy standards.  (Next Generation Personal Finance)

Since 2020, 25 more states have proposed or adopted changes to financial literacy standards. (Next Generation Personal Finance)

Even in states considered to have the highest standards and requirements, students are looking for more real-world connections to prepare for the future. Whitman Ochiai, who recently graduated from high school in Alexandria, Virginia, described his compulsory course as “broader than deep.”

Left to ponder retirement decisions, building a balanced budget, and the intuition behind major purchases, he launched the MoneyEd podcast in 2019 to explore these topics. He said there had been increased interest throughout the pandemic, likely with more students working and families facing economic uncertainty.

“Often the only people who have access to this information are the ones who would have had access to it anyway,” Ochiai said. “Especially for first-generation college students, and parents who may not be homeowners, this is a path for them to gain a deeper understanding of finance.”

Related: Rich school, poor school: As recession looms, test scores show wealthy students perform better in financial literacy

Some teachers in Rhode Island have created elective courses in their schools in recent years, taking into account student desires and seeing how financial literacy can make connections to hard-to-grasp concepts like compound interest. Before now though, funding and implementation has been left to the priority of teachers or schools.

Samantha Demairias teaches math, financial literacy, and computer science at Central Falls High School, which caters primarily to low-income Latino and black students in a working-class town just north of Providence. She hopes the legislation will open the door to state financial support for accreditation and hiring, thus strengthening the ability to teach the subject.

Otherwise, she said, “there is going to be a disproportion between the districts that are able to move around their budgets or their staff and make it work, and the districts that are weighted by all these other things. “.

Demairias teaches about three sections of finance per year; enrollment is still higher even with its elective status, at around 25 to 30 students per class. This fall, she will also teach a section for language learners, which introduces students to America’s monetary and credit systems.

“If you like to learn something today, spread this news and talk it over with your friends. There is no reason why talking about money is such a taboo subject, ”she explains to her students.

Advocates say personal finance education provides students with an opportunity to break down any stigma around conversations about money before embarking on big financial decisions, like student loans, car ownership and financial decisions. credit card debts. The lessons learned can also find their way home and support families facing economic challenges.

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“I see the state’s implementation of this financial literacy guarantee as a kind of gateway to meaningful engagement with families,” said Pat Page, vice president of the Rhode Island JumpStart Personal Finance Coalition and business educator.

Page, Rhode Island’s Former Teacher of the Year, has been a strong advocate for broader financial education for years and was one of the first in the state to teach a stand-alone course. She has helped students, including Sunny Sait, testify for broader financial education before the state legislature – in 2014, 2019 and again in 2021.

Although Sait took Page’s course two years ago, he said he still uses the concepts on a daily basis. Currently on a sabbatical after graduating this spring, he opened a Roth IRA and is budgeting his internship salary to make sure he can still afford the things he loves, like karate.

“My mindset has definitely changed a bit from thinking about money in terms of things, but more about thinking about money as a means of growth, saving and investing. My goal is really to move on. from buying, like being a consumer, to becoming an investor. ”

Many describe the effort to make financial literacy a reality for all Rhode Islanders as both a local and a local effort, driven by students and teachers, but also by state leaders, like Treasurer Seth Magaziner, which helped introduce the legislation.

“The most ardent advocates who worked very hard to get this bill passed were teachers and students. Students who really wanted it taught and teachers who were ready to teach it, ”said Magaziner, who started his career as an elementary school teacher and recently announced his candidacy for governor.

Both the treasurer and the education commissioner see signing the law as the first phase in creating a broader financial literacy landscape in the state – their hope is to expand classes to the middle classes. and elementary. Education, says Magaziner, will make a special difference in Rhode Island.

“We have a large population of mobile immigrants, students who are learning English. We have one of the highest poverty rates in the Northeast. Financial education is not a panacea, it is not a panacea, but it is an important part of the puzzle of how we solve these inequalities and correct them.

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