The shifting tide: The push for financial literacy classes in schools

Preparing youths to be financially savvy before they embark upon their next great chapter in life – going to university and beyond – and potentially taking on debt in the form of student loans or credit card debt, becomes essential to ensure they enjoy good economic standing.

Worldwide, YaleGlobal notes that student debt has been rising. For instance, the federal student loan debt stands at US$1.5 trillion in the US. While numerous factors are at play for this figure, such as the high cost of tuition fees and low or stagnant wages of graduates upon graduation, a solid grasp of financial literacy can help prepare students for the world they will soon be stepping into. 

One American study found that nearly one third of young adults “were found to be ‘financially precarious’ because they had poor financial literacy and lacked money management skills and income stability”.

Conversely, “22 percent of the 18- to 24-year-olds in the study sample were deemed to be financially stable, according to lead author Gaurav Sinha, a graduate student in social work at the University of Illinois.

“These individuals were better at planning and managing their finances, had checking or savings accounts in mainstream banks and were less likely to use costly alternative financial services such as payday lenders.”

Low financial literacy among youths warrants concern as it can lead to problems such as high debt and poor economic stability, both now and in the future. This makes financial literacy classes an important topic to be exposed to while still in school, before the student heads off to college or university.

But steps are in the offing to introduce the programme in some schools. 

Such good news, NL needs to add this to their Curriculum…Ontario’s new career studies curriculum for Grade 10 will include learning about financial literacy, including having students make a plan to fund their first year after high school. https://t.co/T9IzIK1vI8

— Andrea Stack (@andrea_stack) July 5, 2019

In Canada, the Ontario government recently unveiled a new career studies curriculum for Grade 10 students that will include learning about financial literacy. Huffpost reported that this will include having students make a plan to fund their first year after high school and is scheduled to take effect in September.

Ontario’s education minister, Stephen Lecce, said the mandatory course will focus on “monetisable skills” and on jobs of the future, such as those in STEM, in addition to teaching students about the implications of social media in the workplace and how to protect their online privacy.

Over in the US, a growing number of schools are making financial literary courses a requirement. 

According to a 2017 report by the Center for Financial Literacy at Champlain College, the state of Arkansaw has “passed a law that will require more substantive personal finance education in high school, beginning with the class of 2021.”

Meanwhile, Utah requires high school students to take a half-year general financial literacy course as a graduation requirement. The results are promising, with the state to obtaining an A+ in the Champlain College’s report. MarketWatch reports that North Carolina may potentially become the 20th state to mandate financial literacy instruction for high schoolers.

With more states set to follow suit, one hopes that the trend will continue across other schools in the world to ensure students understand personal finance before leaving high school. 

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