Are Today’s Students Prepared to Make Financial Decisions?
Using data from a study by financial literacy non-profit Next Gen Personal Finance, it’s clear that the vast majority of students in the U.S. are not required to learn these basic skills and concepts – and things are particularly worse off in lower-income communities.
Access to Financial Literacy
After analyzing data from high schools representing over 85% of all students, the main conclusions of the study were as follows:
- Only 16.4% of U.S. students are required to take a personal finance course to graduate high school.
- Five states do have a personal finance requirement: Alabama, Missouri, Tennessee, Utah and Virginia.
- But outside of these states, the proportion of students with a personal finance requirement drops to 8.6%.
- Meanwhile, only 5.5% of low income schools (outside of mandate states) have personal finance as a requirement.
Why is this important?
To understand why financial literacy is important, look no further than the most recent grad class: millennials.
With $1.45 trillion in student debt, millennials find themselves in a tough spot to begin with – but 45% regret even taking out loans to that extent in the first place. At the same time, only 24% of the generation demonstrates “basic” financial knowledge, while 70% are already stressed about saving for retirement.
A better financial education could definitely help change some of these figures, whether it is through schools, or through vastly improved online resources that students access on their own volition.