Board should require high school finance courses

February 20, 2011|By Jay Hancock

It's a shame the Louisiana legislature passed, and Gov. Bobby Jindal signed, the 2008 Louisiana Science Education Act.

Not only does the act make it more likely that Louisiana teachers will suggest that evolution and global warming are fake. A side effect of such bills is to set Maryland school officials dead against the idea of mandating a high-school course in personal finance.

The General Assembly is considering making personal finance a requirement for graduation. Two years after incompetent consumers teamed up with predatory bankers to cause the worst economic slump in 80 years, this is a great idea.

Washington has done little to reform Wall Street. The best hope is to train citizens in self-defense.

If the bills in Annapolis are approved, Maryland teens would receive a full semester of instruction in credit cards, checking accounts, late fees, variable rates, mortgages, down payments, stocks, bonds, dividends, careers and paychecks, delayed gratification, insurance and related subjects.

Virginia approved such a requirement two years ago, reducing the chances that grads would someday believe that they're getting out of debt by making a minimum credit-card payment or that scoring a $500,000 mortgage with zero down and no income is a great thing.

But the Maryland State Department of Education is resisting such a requirement here, partly by arguing resource scarcity and partly by saying legislators in Maryland, Louisiana or anywhere else have no business telling educators how to do their jobs.

"Education policy has always been the purview of the state board," says department spokesman William Reinhard. "When the General Assembly gets involved in that sort of thing, we think it's a slippery slope. What's the next thing that's going to be put in as a required course?"

The perceived danger is that Maryland's educational mandates would become like its health-insurance mandates, with every legislator backing a pet cause and the list of requirements ending up like the menu at Panda Garden.

The General Assembly surely won't allow science teachers to start teaching religion. But one can imagine a push for courses on the environment, nutrition or community activism.

In its defense, the state board can and does say that it already upgraded the system's personal-finance pedagogy. Last year it agreed to weave personal finance concepts in with other coursework, starting in third grade.

By fifth grade, Maryland pupils are supposed to understand the consequences of financial decisions. By eighth grade they should be able to predict financial consequences, like what happens when they buy an Xbox with a Visa card and carry the balance for two years at 28 percent interest. By the end of high school they must know how to "evaluate the outcomes of financially responsible and irresponsible decisions."

"It's a good list of standards," says Allen Cox, managing director of the Maryland Coalition for Financial Literacy. "It's a complete list. It's fairly well done. Teachers can embrace it."

But that doesn't carry the full, "pay attention kids because this is important" weight of a semester-long course. Personal-finance lessons buried in government, economics or math courses can get diluted or forgotten as the teacher moves smoothly from compound interest to the banking system to bicameral legislatures.

Students have told Comptroller Peter Franchot that, "if financial-literacy content is simply part of a broader course, they fear it will get lost in the shuffle," according to testimony Franchot gave in Annapolis last week.

Last year, bills to require a freestanding personal-finance course for Maryland high-schoolers passed the Senate but failed in the House. The House might balk again this year, in part because some delegates agree with the board that legislators shouldn't design curricula.

The financial-literacy coalition is neutral on the bills. But many others aren't. Mandating a full personal-finance course is one of Franchot's signature issues.

Carroll County started requiring a freestanding personal-finance course a few years ago. "We got feedback from parents," says Charles Ecker, the former Carroll superintendent who promoted the change. "They told us, 'I'm learning some things,' because a lot of parents don't know anything about it."

Requiring a personal finance course is not a budget buster, if Carroll's experience is any guide. Using course material from national groups promoting financial competence and getting teacher training from the Maryland Council on Economic Education, Carroll County spent less than $38,000, Ecker said.

If the bills pass, "we could certainly make a significant impact" on training other school systems, says council director Mary Ann Hewitt.

Nor is requiring one more high school course a prohibitive opportunity cost. (There's an economic concept kids need to learn: When resources are scarce — and they almost always are — making one choice precludes others.)

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