The Consumer Financial Protection Bureau (CFPB) released the whitepaper, “Transforming the Financial Lives of a Generation of Young Americans: Policy Recommendations for Advancing K-12 Financial Education” in April.
At a conference launching the white paper, CFPB Director Richard Cordray stated, “Financial education should be as fundamental as the education we are all required to receive in American history and government. We must be deliberate about pursuing financial education in our schools.” To that end, the whitepaper outlines five policy recommendations. The Council for Economic Education supports all of these recommendations and has been working actively to promote many through our programs.
Recommendation 1: Introduce key financial education concepts early and continue to build on that foundation consistently throughout the K-12 school years.
CEE supports a spiraled curriculum approach and has lessons, curricula, and professional development programs for all grade levels from K-12. CEE and our affiliate the University of Illinois – Chicago Center for Economic Education are currently working with the Chicago Public Schools system on development and implementation of a spiraled personal finance curriculum culminating in a 12th grade capstone class.
In addition, CFPB encourages states to make a stand-alone financial education course a graduation requirement for high school students.
CEE works closely with our network of affiliates to advocate for high school course requirements in both economics and financial education. CEE conducts a biennial Survey of the States to track requirements regarding standards, high school courses, and testing. Currently 16 states require a course in personal finance for high school graduation, four of which are stand-alone courses. While we support stand-alone requirements for financial education, we believe these requirements should supplement, not supplant, course requirements in economics.
Recommendation 2: Include personal financial management questions in standardized tests.
CEE supports the inclusion of questions focused on personal finance as part of standardized tests and is working with other organizations to determine the best approach. Ideally we would like to see an SAT Subject Test in personal finance in addition to integration of financial education concepts in other standardized tests.
Recommendation 3: Provide opportunities throughout the K-12 years to practice money management through innovative, hands-on learning opportunities.
CEE’s materials utilize an active learning approach with hands-on learning at every grade level from K-12. Innovative programs, such as Classroom Mini-Economy, and Playful Economics, engage elementary students in real life economic and financial decision making activities.
Recommendation 4: Create consistent opportunities and incentives for teachers to take financial education training with the express intention of teaching financial management to their students.
CEE works with our nationwide network of affiliates to provide teachers with instruction in both content and pedagogy, allowing teachers to earn professional development credit and, in some cases, credits towards a master’s degree. In 2012 the CEE network trained over 55,000 teachers across the country. Pre and post-testing of teachers shows gains in both content knowledge and confidence in the subject matter. Students who are taught by teachers who are better-trained in both subject matter and curricular materials will have significantly stronger achievement levels in economics and personal finance, as seen in multiple studies[i]. CEE supports the recommendation for expanded opportunities and incentives for teacher professional development and the funding required for these activities.
Recommendation 5: Encourage parents and guardians to discuss money management topics at home and provide them with the tools necessary to have money conversations with their children.
Parents and guardians are an important source of information for children, however many adults have low levels of financial literacy and require tools and information to support their own learning. CEE’s award winning Financial Fitness for Life program includes parent guides to help bridge this knowledge gap. CEE supports efforts by others to directly educate the adult population to build financial capabilities.
CEE welcomes the opportunity to work with stakeholders and policy leaders at the national, state and local levels on advocacy and implementation of these recommendations.
[i] Watts, M., 2006. What Works: A Review Of Research On Outcomes And Effective Program Delivery In Precollege Economic Education. New York, NY: National Council on Economic Education.