Apr 16, 2024 - World

Texas and California among states lacking personal finance education

Illustration of a red apple with a hundred dollar bill for a leaf. 

Shoshana Gordon/Axios

Many Latino students are missing out on a growing trend that requires high schools to teach personal finance.

Why it matters: Compared to their white counterparts, Latinos have lower rates of bank account ownership, savings and investments. Teaching a new generation about building wealth could alter the future for many families — especially since nearly 30% of the K-12 population is Hispanic.

State of play: 25 states now require at least one semester of finance education to graduate from high school, compared to eight in 2020.

  • In 10 of the states with requirements, all or most schools have begun teaching courses, while 15 states are still in the process of implementing their programs, which requires training teachers and adjusting calendars.
  • But it's a concern that so many states with a large Hispanic populations don't have personal finance education in schools, says Yanely Espinal, director of educational outreach for Next Gen Personal Finance.
  • "That's where we need to make sure we're advocating, so we can level out the playing field, so that we have just as much access to this type of education and empowerment as really any other ethnic group," Espinal adds.

The big picture: Extensive data collection and research shows personal finance courses help improve credit scores, reduce loan delinquencies and lead college students "to smarter borrowing," says Carly Urban, an economics professor at Montana State University.

  • That means students may seek out federal loans, grants and scholarships instead of accruing credit card debt, Urban adds.
  • Urban says the key is to keep personal finance education simple for high school students.
  • "Young people can learn a lot about delayed gratification," or how to "form habits and norms that set them up to have a really strong financial future."

What to watch: Voters in California will decide on a ballot initiative this November that would legally require financial education in schools.

  • "Culturally, that shift is not just going to happen by itself," Espinal says. "We need to really give education, access to education and empowerment and the confidence to understand the risk assessment for all the different types of investments that exist and what the right portfolio for your family is."

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