MIDQUARTER ASSIGNEMNT – RESEARCH REPORT 5/17/15 Allena Nimetz; 0667264

It is a common belief one major contribution to the Great Recession of 2008 was the public’s overall lack of financial literacy, in addition to unchecked mortgage and investment industries. To fend off further economic mishaps, school districts have been compelled to teach financial literacy. While there is broad agreement on the importance of teaching financial education and capability to children and youth, there is little agreement about what constitutes effective financial education and capability initiatives. Without regulation, curriculum is taught differently in every school and can be outdated and irrelevant when applied to a rapidly changing global economy. Although the concept of Common Core State Standards (CCSS) in education has met with debate, most states have adopted the standards for mathematics and language arts, and require students to think mathematically about real-world issues. Therefore, including financial education within existing Common Core curriculum – rather than a standalone class or graduation requirement – is an appropriate solution to financial literacy concerns in American education. A blending of courses addresses an immediate need, provides readily implementable standardization and establishes funding and research for financial education, using an existing program as a catalyst for change.
Resolves an acute need
“Financial literacy” was first championed by the Jump$tart Coalition for Personal Financial Literacy in its inaugural 1997 study “Jump$tart Survey of Financial Literacy among High School Students.” In this study, Jump$tart defined “financial literacy” as “the ability to use knowledge and skills to manage one's financial resources effectively for lifetime financial security.” The financial crisis and recession of 2008 exposed behaviors indicating low levels of financial literacy across the nation. To avoid another financial crisis in the future, and to improve personal finance outcomes for American citizens, student education in personal finance must be a priority.[1] Including these lessons within the CCSS curriculum provides an opportunity to offer an immediate solution through relevancy while achieving near-universal coverage of students.
Many high school students are making financial choices every day, as they work, shop, pay taxes, and most importantly, consider student debt choices for college. "A college degree is still the best path to a job and decent pay, and while loans are increasingly needed to get through school, graduating with burdensome debt is not a foregone conclusion," said Lauren Asher, president of The Institute for College Access and Success (TICAS,) in a statement. "Where you go to college matters, and the kind of loans you have matter, too.” [2]
About 70 percent of 2013 graduates left college with an average of $28,400 in debt. [2] Student loan debt is having a profound impact on the daily lives and spending habits of young Americans, casting a cloud over the nation’s economic recovery.

The mere existence of the debt is a burden and impacts important lifestyle decisions. A survey recently conducted by American Student Assistance® (ASA) found those with student debt are delaying decisions to buy a home, get married, have children, save for retirement, and enter a desired career field because of their debt. This downward spiral has a cascading impact on the nation’s economy as the generation charged with investing in the nation’s future is delaying their lives because of student debt. [2] There is unlikely to be any great shift in the way higher education is funded. Offering lessons in existing curriculum around budgeting, credit cards, compound interest and other basic personal finance skills ensure borrowers have better means of managing debt they take on – including student loans. This provides an immediate solution to concerns around financial literacy in a way that students will find relevant. [3] The Dodd-Frank Act established an "Office of Financial Education" within the Consumer Financial Protection Bureau to develop and implement a strategy to improve the financial literacy of consumers. This federal effort comes in addition to state initiatives requiring high schools to include personal finance in their standard curriculum. Despite this, the Council for Economic Education (CEE) has stated that personal finance isn't being taught enough in schools around the country. This is corroborated with results from a study conducted by Champlain College’s Center for Financial Literacy. Using national data, the study graded all 50 states on their efforts to produce financially literate high school graduates. Just 40 percent of states were given grades of a B or higher. Sixty percent of states have grades of C or less, with 44 percent having failing grades of D or F. [1] The incorporation of financial literacy courses has been relatively slow and unwieldy. However, forty-five states, four U.S. territories, the District of Columbia, and the Department of Defense Educational Activity have all adopted the Common Core State Standards. In light of this, blending finance education into this existing structure provides an opportunity to offer programs that can achieve near-universal coverage. [4]
A nearly unanimous 99% of adults now agree that personal finance should be taught in school and has immediate relevancy in the current economy, according to a poll from Harris Interactive, sponsored by Bank of America. [5] Incorporating financial education in in CCSS addresses the immediate need for financial literacy by teaching relevant information in an established system implemented across most of the nation.
Creates executable standardization
While there is a broad array of youth financial education strategies, there is, simultaneously, a relative absence of program evaluation and research to measure effectiveness. This makes it difficult for policymakers to determine which strategies to embrace and implement. [4] Despite good intentions, the initiative is terribly disjointed and the overwhelming amount of information may be undermining efforts. [6] There are several reasons for this disconnect: * There is a lack of competent instructors: only one in five teachers feels qualified to lead a personal finance class, according to a University of Wisconsin study. * There are no personal finance concepts included in standardized tests and so they are not being taught. * There is no federal authority to mandate personal finance classes; education is run at the state level and varies by state. * There is little academic agreement as to what kind of personal finance instruction works.
Integrating financial literacy into the CCSS program addresses these issues by establishing guidelines for financial education delivery and identifying easily implementable standards.
It is important to note states can adopt personal finance content standards, but stop short of requiring schools to implement those standards as there are no standards specific to financial education. Because they are not required by law, they become voluntary and less effective. While there can, and should, be many types of financial education in schools – particularly to reflect the unique needs and diversity of each community – these approaches and delivery could benefit from sharing a common foundation. [4]

In this respect, the development of financial literacy within the Common Core State Standards is instructive. [4] To facilitate teaching standardized K-12 economics and personal finance lessons, the CEE released the National Standards for Financial Literacy (NSFL), aligning more than 400 lessons to the CCSS. The CEE also launched an online tool allowing educators to search and connect financial literacy lessons by their corresponding standards. “The Common Core State Standards Initiative is a significant factor in education today and CEE's lessons offer a …way to teach personal finance and economic education while incorporating the competencies in the Common Core.” Said Nan J. Morrison, CEO and president of CEE.
Written in accessible, easily understandable terminology, the standards are not tethered to any specific curriculum, do not assume any prior financial knowledge, and are designed to be applicable to all socioeconomic groups, according to the CEE. [6] What’s key is that there are existing, published standards already established to work with the CCSS system. Because of this, a federal regulation of financial literacy in accordance to these standards and within Common Core is easily implemented and unvarying.
To ensure success of a financial literacy push, teacher training is critical. To effectively educate our students about personal finance, we need confident, well-trained educators. While personal finance classes will likely remain elective offerings, by connecting personal finance to what students are learning in their core classes we can strengthen both the teaching of personal finance and the teaching of the Common Core State Standards [1]. The federal government sponsors three useful websites at mymoney.gov, moneyasyougrow.org and moneyasyoulearn.org. These offer guidance to teachers and school districts through lesson plans, problem sets, nonfiction texts and other resources that elucidate the topic of personal finance within the context of the Common Core. [1] The Treasury Department, Federal Deposit Insurance Corp. and others offer additional and content-complimentary education materials.
President Obama’s Advisory Council on Financial Capability regarded the Common Core Standards as a way of affecting change within financial education and literacy today. With the NSFL creating a foundation for financial education and the CCSS offered as footing from which to teach, there is the opportunity to pursue a common policy framework supporting the current diverse approaches among states. [4]
Funds research and evaluation
Almost everyone agrees financial education is important. Nine in 10 adults say it is “essential” for adults to be knowledgeable about their personal finances and that if more were knowledgeable it would benefit the U.S. economy. But because the push for financial literacy in schools is relatively young, there are few studies justifying the effects of financial literacy education in school. Embedding personal finance modules into other courses throughout the school year, instead of having a dedicated financial literacy or personal finance class, generates learnings justifying personal finances as a legitimate academic discipline and funds research necessary to achieve this goal.
Aligning existing personal finance programs with the demands of the Common Core State Standards provides trending results and ensures classroom personal finance training is working by giving students standard assessments on knowledge and behaviors. [1] Schools and teachers will have added incentives to teach to topics queried in those assessments. In addition, there is the ability to systematically measure and track the performance of students on financial education content. [4]
A study of 65,000 students was conducted by EverFi and Higher One, organizations that help implement financial literacy programs. The study, which is in its second year, is the first comprehensive analysis of the impact of high school financial literacy education on not only knowledge but attitudes and behaviors. Results show students required to take a financial literacy course in high school are significantly more likely than their peers who didn't take class to be financially responsible. Students who took a class did better on the survey's financial knowledge questions, were found to be more averse to debt, more likely to pay credit card bills on time, and less likely to go over their credit limit. By including financial literacy benchmarks through CCSS, additional insight can be accumulated to support even stronger financial education solutions.
Given the current budgetary climate, it is no surprise that slightly under half of institutions who currently have financial education programs report they receive no additional funding to support their activities. Of the schools reporting some combination of funding sources to support their financial education activities, almost one in three are operating programs with a budget of $5,000 or less. Working with minimal budgets, these institutions often employ online financial education, group education or more passive forms of delivery where they can reach more students with fewer dollars. Incorporating financial education and literacy would create groundwork for research and evaluation on the teaching of financial literacy [1] with minimal cost implications to schools.
Conclusion
The Great Recession of 2008 demonstrated how little Americans understood personal finance and financial literacy. Despite public and political agreement this should be incorporated into education, little has been done to pursue a common policy to align current diverse approaches. In addition, since financial education is not part of the Common Core State Standards, it likely does not figure prominently in curricula states adopt. This raises the possibility that financial education concepts might not be included in standardized assessments unless they are incorporated by requirement into an existing educational standard in Math or English Language Arts. [4]
Developing integrated curricula by adding financial education concepts and lessons into the existing CCSS program is an appropriate solution to the lack of financial literacy in American education. It enables schools to address an immediate need through relevancy, while achieving near-universal coverage. [4] CCSS integration also provides readily implementable standardization by applying established guidelines for financial education within a framework already developed against Common Core. Similarly, incorporation establishes funding and research, using the existing program as a catalyst for change.

References
[1] Pelletier, J. “National Report Card on State Efforts to Improve Financial Literacy in High Schools.” Champlain College, Center for Financial Literacy. n.p. Summer 2013.
[2] Bidwell, A. "Average Student Loan Debt hits $30,000". USNews.com. 13, November, 2014. Web. 12, May, 2015
[3] Coleman, H. "Is It a Mistake to Try to Teach Financial Literacy in High School?" DailyFinance.com, n.p. Web. 1, February, 2014.
[4] Consumer Financial Protection Bureau (CFPB). "Transforming the Financial Lives of a Generation of Young Americans." n.p. April, 2013
[5] Kadlac, Dan. "Why We Want—But Can’t Have—Personal Finance in Schools." Time.com.10, October, 2013. Web. 8, May, 2015.
[6] Eyden, T. "CEE Details News Standards for Financial Literacy." AccountingWeb.com.25, April, 2013 Web. 11. May, 2015
[7] "Life Delayed: The Impact of Student Debt on the Daily Lives of Young Americans." American Student Assistance. n.p. 2013. Web. 12, May, 2015. Retrieved from: http://www.asa.org/site/assets/files/2205/life_delayed.pdf
[8] Trombitas, K. "Snapshot of Financial Education Programming: How Schools Approach Student Success.” n.d., n.p. Web. 13, May, 2015. Retrieved from: https://www.cgsnet.org/Inceptia_FinEdSurvey_Whitepaper.pdf