BOSTON – Financial literacy legislation sponsored by State Senator Jamie Eldridge was heard by the Joint Committee on Education earlier today. Senate Bill 204, “An Act Relative to Financial Literacy in Schools,” would require that personal financial literacy be taught at all schools in the Commonwealth.
“Today’s youth are bombarded with a multitude of financial options and responsibilities at an increasingly young age, yet many are ill-equipped to make informed decisions about financial matters. By teaching children the financial education basics in school, we will help them make educated financial decisions in the future, preventing future bankruptcies, foreclosures, and unmanageable debt,” said Eldridge.
“This is a result that’s good for society as well as for individuals,” Eldridge added. “Over the long term, the investment we make in teaching children financial literacy now will help strengthen our economy and prevent future economic crises. “
The bill would require the Department of Elementary and Secondary Education (DESE) to develop standards and objectives for personal financial literacy for grades K-12 in the mathematics curriculum. The curriculum would include information on loans, borrowing money, interest, credit card debt, online commerce, rights and responsibilities of renting or buying a home, saving, investing and planning for retirement, and banking and financial services.
Treasurer Steve Grossman also testified today in support of financial literacy legislation. “Students who do not know how to balance a checkbook, understand the principles of compound interest, and are uninformed about the dangers of credit debt are at a significant disadvantage in society and the workplace,” said Grossman. “Moreover, this need takes on even greater urgency for those who are about to attend college or are already enrolled. College loans will be one of the greatest debt burdens they will assume in the course of their lives, and sadly too few students are properly equipped to cope with the challenge.”
Also lending support to the bill was the Massachusetts Financial Education Collaborative (MFEC). “Every day we see the fallout from financial choices made by adults without financial savvy. Kids should not leave school without the tools to manage in this sophisticated marketplace,” noted Margaret Miley from MFEC.
The legislation was given unanimous approval by the Senate last session, but unfortunately was not taken up in time by the House of Representatives. At least thirteen states now require students to take a personal finance course or personal finance included in an economics course as a high school graduation requirement.
In June 2009, the Asset Development Commission released a report recommending that the Legislature implement financial education in schools to better prepare youth for the financial decisions of the future. The Commission, which Eldridge chaired, was charged with studying what it mean to be low-to-moderate income in the Commonwealth of Massachusetts, what help the state provides in moving families up the economic ladder, and what barriers are standing in their way.