Pa. House should quickly pass financial literacy bill
Abill before the state Senate would require Pennsylvania high school students to pass a half-credit financial literacy class. It’s a smart move that Michigan passed in 2018; it’s time to get it done here.
Senate Bill 1243, already approved by the House, would require financial literacy courses to teach the true cost of credit, how to choose and manage a credit card, prepare and file tax returns, and the rudiments of borrowing for big-ticket items, such as cars. Classes would explain home mortgages, personal insurance policies, credit scoring, credit reports and planning and paying for postsecondary education.
Financial literacy classes would start in the 2024-2025 school year. By taking them, Pennsylvania high school students would know more about personal finance than many — if not most — adults.
The Financial Health Pulse Report from the Financial Health Network estimates that only 31% of Americans are financially healthy, including only 54% of people making over $100,000 a year. Financial illiteracy can make an upper-middle-class salary less comfortable than it looks. Meanwhile, 55% of Americans are “financially coping,” which means an unexpected expense could make them financially insecure.
The report states only 15% of Black Americans are financially healthy. Exposing all Pennsylvania students to the financial literacy curriculum could help correct that inequality.
Financial stability decreased this year, for the first time in five years. Despite the disruptions of the pandemic, Americans’ financial health generally improved during 2020 and 2021, due to cash infusions from the federal government — including expanded child tax credit payments that should be made permanent.
Now, however, financial health has returned to pre-pandemic levels and, with galloping inflation, probably declining further. In addition, interest rate increases will likely continue, making all debt more expensive.
With easy access to credit, the need for financial literacy — understanding the true cost of debt and compound interest — is enormous. Nothing would help students more in preparing for the practical realities of today’s world.
The state House should fast-track this bill, and send it to Gov. Tom Wolf before the end of the year.