High School students in Alabama would be required to take a financial literacy course to graduate under a proposal in the Legislature.
Sponsored by Rep. Andy Whitt, R-Harvest, House Bill 164 would require public school students to complete a course on personal financial literacy and money management and pass a standardized assessment before high school graduation. The bill was approved in the House Education Policy Committee on Wednesday.
“What people don’t understand is that these are not just math skills; they are life skills,” Whitt told Alabama Daily News. “Basic financial literacy skills like calculating your salary, applying for loans, and saving money for retirement are essential for survival in the modern world.”
After working in the financial industry as a community banker for nearly 30 years, Whitt says he has witnessed the continuing decline of consumers’ basic skills when dealing with their personal finances.
“Unfortunately, those skills are no longer being taught in all homes, and although the standards are in the State of Alabama’s curriculum, the knowledge is not being formally assessed. Waiting until students get in the adult world to find out whether or not they have that basic knowledge is often too little, too late,” Whitt said.
The Alabama State Department of Education, beginning in the 2013-14 academic year, implemented financial literacy education as part of a required career preparedness course.
Along with academic planning, career development, and technology, ninth-grade students are introduced to managing finances and budgeting, saving and investing, banking and financial institutions, credit and debt, and risk management and insurance.
Alabama does not currently administer standardized testing for financial literacy.
Whitt says he has worked with State Treasurer Young Boozer, Lt. Governor Will Ainsworth and the State Board of Education for the past two years to adequately address students’ needs and ensure the quality of the bill.
“Many respected institutions, such as the Federal Reserve Bank, the FDIC, all kinds of banks, governmental entities and nonprofits have well-established financial education programs, but it is a fractured system, and it creates an ineffective and inconsistent process,” Boozer told Alabama Daily News. “Something needs to be done differently to reach the greatest audience and have the greatest impact, and I believe it is to leverage something that the state of Alabama already had in place.”
As written, HB164 will institute a financial literacy and money management course as an Alabama high school requirement, establish the administration of a financial literacy examination and require reporting the examination results to the State Department of Education.
All of these factors, Boozer says, need to be added to financial education in the state.
“I have looked at HB164, and in a very concise and understandable way, they have identified those issues that need to be addressed,” Boozer said.
Last year, Florida and Georgia signed into law bills similar to HB164 that required enrollment into a standalone financial literacy course before graduation.
Alabama is currently known as one of the 18 states that require some financial literacy education, according to data from Next Gen Personal Finance, a nonprofit focused on providing financial education to middle and high school students.
“We’re not asking for new teacher units or new classes to be added. We want to ensure that the appropriate amount of additional emphasis is being placed on the acquisition and application of these basic life skills,” Whitt said. “Not all of our students are receiving these life skills at home, so it’s our responsibility to ensure that they leave school with basic knowledge about how to manage their personal finances.”
The legislation has garnered support from sponsors from both sides of the aisle. It is co-sponsored by Reps. Prince Chestnut, D-Valley Grande, Mike Shaw, R-Hoover, James Lomax, R-Huntsville, Jeff Sorrells, R-Hartford, Terri Collins, R-Decatur, Danny Crawford, R-Athens, Rex Reynolds, R-Hazel Green, and House Minority Leader Anthony Daniels, D-Huntsville.