The biennial Survey of the States done by the people from the Council for Economic Education (CEE) has came out and it’s got some pretty interesting results to share with us. CEE is the country’s leading organization which focuses on the financial and economic education of children from kindergarten through high school. According to them, the situation is not great, to say the least.
Namely, the CEE found that the number of U.S. states requiring their high school students to finish an economics course has actually dropped in the last two years while obligatory personal finance in upper grades has remained stagnant over that same period. At the moment, only 20 states mandate an economics course for high school students. The number of states that require a course in personal finance is even lower, standing at 17. Out of those, only five states require a standalone semester course.
Something of a silver lining is that the numbers are mostly better than those from 1998, when the CEE first started tracking them. Since then, we have seen a gradual rise in the introduction of mandatory economics and personal finance courses in high school. That being said, the number of states which require testing on economic concepts has dropped from 25 to only 16 since 1998. As you might suspect, this is simply not enough.
The CEE report also included numbers from the Programme for International Student Assessment (PISA), which among other things also tests 15-year-olds in Financial Literacy. The U.S. students were ranked just below average, somewhere in the middle of the pack.
What is more important, the positive effects of comprehensive economics and personal finance education in high school has been proven without a shadow of a doubt. According to the Survey of the States report, average credit scores of young people increase noticeably once their state starts introducing mandatory financial education. This is most obvious in cases of Georgia, Texas and Idaho whose young population posted much better numbers once these states started teaching and testing financial education in high schools.
The report also singles out Virginia as a particularly successful state when it comes to introducing economics and personal finance courses to high schools. They have even gone through the process of training high schools teachers to teach these subjects and deliver the best possible education to Virginian students. The first students in Virginia who have been exposed to extensive economics and personal finance education graduated in 2015 and it is only a matter of time before it becomes obvious what kind of an effect this has on their financial future.
Kudos Virginia, but when will other states join?