Maryland, DC should require K-12 financial education for graduation

Across the country, there’s growing agreement on the need to teach financial literacy in our nation’s K-12 schools. Yet, if we want to truly set our children up for a lifetime of personal financial knowledge, we need to pass more state financial-literacy legislation that requires high-quality, stand-alone courses for graduation.

That’s exactly what Virginia has done. In 2009, amid growing concern about the economy, it became one of the first states in the U.S. to require stand-alone classes in personal finance and economics to graduate, as part of the national W!SE Financial Literacy Certification program.

Classes teach consumer skills, planning for expenses, knowledge of personal banking, credit and loans, taxes, investments and savings. Some Virginia students even have the opportunity to work at actual in-school branches of a credit union open exclusively to participating schools’ teachers and students.

Maryland and D.C. should step up and join Virginia as national leaders in high-quality financial education.

In a few counties, educators, parents and representatives are working to do just that. Now, it’s time to take action and ensure everyone has the same opportunities. Any further delay unnecessarily leaves more children behind.

Today, in D.C., only two public high schools teach standalone personal finance courses. D.C. schools recently received an “F” on “The Nation’s Report Card on Financial Literacy” from the nonprofit American Public Education Foundation, which recommended that DCPS “implement grade-specific K-8 personal finance standards and require a stand-alone personal finance course for high school graduation.”

In Maryland, a handful of counties including Allegany, Calvert, Caroline, Carroll, Charles, Frederick, and Garrett count financial literacy among their graduation requirements. Prince George’s County voted unanimously in April 2020 to make a Financial Literacy course required for the class of 2024. Yet, for all the success in Prince George’s County and elsewhere in Maryland and D.C., progress remains uneven. That’s precisely why we need legislation at the state and district levels to even the playing field.

Last year, Maryland introduced bills HB 916 and HB 1299, which would have established a requirement for standalone financial literacy education, but they failed to pass the legislature, as did D.C. bill B24-81, which would have created a district-wide financial literacy education program with a pathway to later enact requirements.

Unfortunately, Maryland and D.C. are not alone in their struggle to require high-quality financial literacy education. Today, only 11 states have passed laws for standalone, half-semester courses that focus solely on personal finance as a requirement for graduation. Beyond that, 21 states require some personal finance education, but it can be incorporated into another course.

That is like trying to teach science by including a few lessons during math class. We wouldn’t expect a mastery of basic scientific concepts in that scenario, and we shouldn’t expect mastery of basic financial concepts until it’s treated as seriously as math, science, English, history and other core disciplines. And students clearly aren’t receiving quality financial education at home as many parents are afraid of or uneducated themselves about personal finance. A 2019 study showed that 72% of parents are not talking to their kids about money, and 82% of those parents cite fear as the barrier keeping them from doing so.

This deficit of effective financial education perpetuates the cycles of debt and poverty and reduces the opportunity for upward socio-economic mobility and a secure future, especially for those living in under-resourced communities.

We know that financial education works. The National Bureau of Economic Research released a working paper discussing 76 randomized experiments it conducted with more than 160,000 individuals and reported that “the evidence shows that financial education programs have, on average, positive causal treatment effects on financial knowledge and downstream financial behaviors.” Further, a World Bank peer-reviewed study found that personal finance learning leads to higher credit scores, lower delinquency rates, smarter student loan decision-making, and avoidance of predatory lenders, which adds up to significant economic benefits to districts, counties and states.

Ideally, high school courses would be just one piece of lifelong financial education. It would start in elementary school when a child’s natural curiosity makes it the perfect time to begin introducing financial concepts and continue on through middle school, high school and college when students are earning and managing their own money. And it can’t stop when school ends: Financial services companies and banks must offer their customers and employees useful, timely courses in financial literacy. Financial literacy should be a lifelong journey. We can get our children started on the right path by following Virginia’s example and introducing high-quality, stand-alone financial education as a requirement for graduation in Maryland and D.C. schools.