BOSTON — Lowell is one of two dozen Massachusetts cities being targeted for a new financial-literacy program designed to teach high-school students about personal finances.
The legislation, which is included in the fiscal 2013 budget, aims to help students understand how to manage money before graduating.
If the program is signed into law, the Department of Secondary and Elementary Education will develop a three-year pilot program for 10 public high schools located in Gateway Cities throughout the state. The program is anticipated to cost $250,000 in the first year.
There are 24 such cities in Massachusetts, including Lowell and Fitchburg. The districts will be chosen based on a competitive grant process.
State Sens. Barry Finegold and Jamie Eldridge filed separate bills last year aimed at curbing the alarming number of students who find themselves under a mountain of debt. They praised the state for taking the initial steps that they hope will lead to a statewide course requirement.
“I feel strongly that every single school system should offer financial literacy,” said Finegold, an Andover Democrat. “Knowing how to balance a checkbook, knowing how credit cards work is just as important as learning science and learning certain math skills.”
While the two lawmakers’ bills proposed adding personal-finance lessons to the math curriculum for all students, Finegold said trying the program in Gateway Cities makes sense, given that those cities often have the highest instances of foreclosures in the state.
Gateway Cities have populations greater than 35,000 and less than 250,000. They also have a median household income below the statewide average, and a rate of educational attainment of a bachelor’s degree or higher that is below the state average.
The cities often receive state grants and support for economic and community development.
Topics expected to be covered in the financial-literacy classes include loans, interest, credit-card debt, online commerce, renting or buying a home, and planning for retirement.
According to the state Office of Consumer Affairs and Business Regulation, teenagers spend, on average, $5,400 a year, about 98 percent of what they earn. About 40 percent of it is on clothing. Also, more students drop out of college due to teen-accumulated debt than for academic reasons.
Personal finance is taught in some Massachusetts high schools, but it’s not required. Fewer than one-third of all states require personal financial literacy, with New Hampshire the only one in New England.
Eldridge, an Acton Democrat, said the program will help students avoid bankruptcies, foreclosures and unmanageable debt later in life.
“It’s a low-cost investment that will pay dividends down the line, he said.
A financial-literacy bill was filed by former state Sen. Susan Tucker, D-Andover, in 2009. It passed in the Senate but never reached the House floor for a vote.
The budget has been passed by both the House and Senate. It now awaits the governor’s signature.