Youth Financial Literacy in the United States: A Patchwork Approach
While the financial well-being of Americans has generally increased since the last recession, the latest survey results from FINRA indicate a national population that is still struggling to meet its financial obligations, save for retirement or effectivel
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Youth Financial Literacy in the United States: A Patchwork Approach Julia A. Heath
Abstract While the financial well-being of Americans has generally increased since the last recession, the latest survey results from FINRA indicate a national population that is still struggling to meet its financial obligations, save for retirement or effectively manage debt. Absent a national educational policy, the American experience of financial education is dependent upon state and local mandates. The majority of states require financial literacy standards K-12, but a smaller number require those standards to be implemented; a much smaller number require testing on the standards. In addition, the question of financial literacy’s efficacy remains. While behavioural change is the gold standard, financial education’s effect on subsequent behaviour is difficult to ascertain. Definitive statements concerning its efficacy with respect to knowledge improvement are also challenging, given the myriad methodological issues surrounding past research. The future of financial education in the US suffers from a willing spirit, but a weak body. Inclusion of financial education in school curricula receives overwhelming support from teachers, parents and policy makers; the decentralized nature of the American education system makes such implementation difficult. Two possible approaches include integrating financial education into the widely adopted Common Core standards, and implementing a “Smart” state model, first developed in Tennessee and being implemented in other states. The ultimate solution for financial education delivery in the US is to increase the rigour around the conceptualization and construction of its curriculum, elevating its status from a set of skills to a body of knowledge, putting it on par with other, more traditional disciplines.
Keywords Financial literacy Financial education education system Common core standards
US
state standards
US
J.A. Heath (&) Economics Center, University of Cincinnati, 225 Calhoun, #370, Cincinnati, OH 45219, USA e-mail: [email protected] © Springer Science+Business Media Singapore 2016 C. Aprea et al. (eds.), International Handbook of Financial Literacy, DOI 10.1007/978-981-10-0360-8_25
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Financial Well-Being in the United States
Many indicators of financial well-being have shown improvement in the post-recession years in the United States. Both mortgage delinquency rates and foreclosures have trended down substantially in recent years; foreclosures, for example, are at their lowest levels since 2005 (Fig. 25.1). Likewise, serious delinquency rates on Home Equity Lines of Credit (HELOCs) have also been on a downward trajectory through 2013. The delinquency rate on credit cards (90+ days) increased slightly at the end of 2013, but as shown below, there is only one type of loan that has had a consistent, upward trajectory in delinquency rates: student loan debt (Fig. 25.2). Student loan debt now tops $1 trillion, adding $114 billion in 2013 alone. Approximately 12
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