Vermont has earned a "D" grade for teaching personal finance to high school students.
A report issued by the Champlain College Center for Financial Literacy says the state does little to make sure students learn about saving, investing and maintaining good credit scores as they prepare for life after graduation.
The five states earning an "A" in the report require all high school students to take the equivalent of a semester-long course in financial literacy before they can graduate.
A dozen state receives an "F" because they have no provisions for teaching personal finance either as an elective or a requirement.
“States that got a D got a D because they require something be taught somewhere, but they leave it up to the local districts to do it and it's very minimal,” says Center for Financial Literacy director John Pelletier. “It’s not even clear how the state is making sure this is occurring at the school district level.”
Pelletier says without a state graduation requirement, too many students slip through the cracks.
That’s why states where curriculum decisions are made at the state level fare better in the report than those where the decisions are made locally.
Alabama, which requires a personal finance course for high school graduates, receives an “A." A local control state like California, where there is no state stipulation, receives an "F."
Pelletier says states like Maine and Maryland, which have strong local control, require financial literacy instruction, but leave it to the local school districts to determine how to do it.
According to Pelletier that approach could also work in a local control state like Vermont.
"There are ways to promote this in a local control environment, but I think it does require leadership by the agency of education,” he says.
Vermont Secretary of Education Rebecca Holcombe agrees that financial literacy is a critical priority and says the state can do more to stress its importance. But Holcombe says Vermont has long a tradition of leaving decisions like that to local schools.
And she says schools are already dealing with budget issues, legislative demands and declining enrollment – so it’s not the right time for another mandate.
“Frankly, right now I think we’re in a situation where our systems are under so much pressure,” she says.
Some local schools have taken the initiative to create their own courses. In Vermont, eight of the state’s 65 high schools require students take a semester-long financial literacy course to graduate. Union 32 High School in East Montpelier is among them.
“We focus on six learning themes,” says George Cook, one of three U-32 financial literacy instructors. “Financial responsibility, incoming careers, planning and money management, credit and debt, risk management and insurance and savings and investing.”
Cook says students spend time reading the Wall Street Journal, Forbes, Money Magazine and other sources of financial information, but there’s also a great deal of classroom engagement.
“I think some of the best things that we do for our kids is have open, honest conversations with them. We use real-life stories with them about how we manage our money,” he says.
Making personal finance a required course can raise questions about costs and the impact on other course offerings at a school.
Cook says those issues were raised at U-32, but ultimately the school board, the administration and department heads all supported the decision.
The course didn’t require any new hires and teachers received training help from the Center for Financial Literacy.
Center director Pelletier says a recent study looked at three states with personal finance course requirements and compared their graduates to those in neighboring states without a requirement.
He says the study found those who took the courses had better credits scores and lower debt default rates.