Alarmed by statistics that suggest high school graduates lack a basic knowledge of money management, Carroll County school officials want to join a handful of other local districts that require students to pass a financial literacy course to graduate.
"Some kids think you don't have to pay a credit card back because their parents get the bill and pay it," Carroll Superintendent Charles I. Ecker said yesterday. "Kids are not learning about financial responsibility [because] a lot of parents don't know how to manage money."
Ecker said students need to learn how to analyze the costs and benefits of their spending decisions.
"Students are not getting this at home," said Ecker, who supports the graduation requirement that is expected to be proposed at tonight's school board meeting.
If board members agree, students starting ninth grade in 2007 will be required to pass a half-credit financial literacy course to graduate.
Carroll offers an elective course that teaches such concepts as money management, consumer rights and responsibilities, credit, savings and investing.
In Maryland, Baltimore, Harford, St. Mary's and Talbot counties require students to take a financial literacy course.
Nationally, 14 states, including Virginia, require a financial literacy course to graduate. Maryland and the District of Columbia don't have such a requirement, said Laura Levine, executive director of the Jumpstart Coalition for Personal Financial Literacy.
"About one in five students gets a personal finance course" during high school, said Levine, whose organization surveys high school seniors every other year to gauge their financial aptitude.
A sample question from this year's survey - distributed to 5,775 high school seniors in 37 states asks students:
"Matt and Eric are two young men. Each has a good credit history. They work at the same company and make approximately the same salary. Matt has borrowed $6,000 to take a foreign vacation. Eric has borrowed $6,000 to buy a car. Who is likely to pay the lowest finance charge?
a) Matt will pay less because people who travel overseas are better risks.
b) They will both pay the same because they have almost identical financial backgrounds.
c) Eric will pay less because the car is collateral for the loan.
d) They will both pay the same because the rate is set by law."
About 53 percent correctly answered C. Nearly 25 percent answered incorrectly that Matt and Eric would pay the same because they had identical financial backgrounds.
"These are consumer-related type questions," Levine said. "We're not talking high finance."
Students on average scored 52.4 percent on 30 questions, Levine said.
Thirty-eight percent of the students were considered to have passed the testing portion of the survey, which also included 21 "demographics and attitude" questions, she said.
"If you say a 90 and above is an A, an 80 and above is a B, you would need to get a 60 to get a D," Levine said. "Overall, this survey is an indication that kids don't know a lot about finances."
Many school districts offer financial literacy courses as an elective, but only about 10 percent of students in those systems take advantage of them, said Allen Cox, managing director of the Maryland Coalition for Financial Literacy.
"Just trusting kids to take it on their own doesn't work well," Cox said. "We want to get all 24 [school districts] and private schools to make financial literacy required. There are a lot of financial literacy needs that are generally not addressed by parents."
Cox said that in a 2004 poll, college administrators indicated that "excessive credit card debt" was the primary reason students dropped out. The secondary reason was low grades.
Thomas G. Hiltz, president of the Carroll school board, said he supports teaching financial literacy to students but isn't convinced that making it a graduation requirement is the right step.
"The last thing you want to do is send someone out into the world unprepared to deal financially with what is going to confront them," he said. "But I need to understand the need for requiring this."
Hiltz said he wants to consider whether classes now required are adequately covering financial literacy concepts. He said he also wants board members to contemplate eliminating some other requirement if the financial literacy one is added.
Carl A. Delmont, chief executive officer of Freedmont Mortgage and the father of a daughter who will start first grade this fall in Carroll County, urged board members at a recent meeting to begin requiring a financial literacy course.
He said that in the mortgage industry, he sees many clients who don't know the basics about maintaining good credit and managing their finances.
"In 2005, more people declared bankruptcy than graduated from college," said Delmont, who regularly appears on television and radio. "It's a huge negative cycle, and the only way to break it is through education."