Imagine an America unburdened by debts. In this America, no one would be worried about the impending collapse of society due to our deficit spending, and no one would be concerned about how they are going to survive with outrageous student loans weighing them down for twenty plus years of their lives. No one would talk about how much debt was affecting their lives. This differs from current day because debt is a major talking point in the lives of Americans, and the weight of debt lifted off our shoulders would be such an extraordinary event that there would be cause for a national holiday celebrating this change.

However, this is not likely to ever occur, but requiring high school students to take personal finance classes would greatly help reduce the amount of debt in America. Personal finance is the management of money and financial decisions for a person or family including budgeting, investments, and retirement planning. Personal finance education should be required in high school because it will help create a more financially literate society that can avoid making the same mistakes that led to devastating events, such as the Great Recession, while also helping the younger generation plan for their futures in order to live within their means. 

The Great Recession began in 2008, and it was almost a two-year period of worldwide economic decline. The Great Recession, considered the worst recession to occur since the Great Depression, was caused by the Financial Crisis of 2008 which started in the United States when the subprime mortgage bubble burst. Subprime mortgages are mortgages that are offered to borrowers who have bad credit since they are usually not able to receive normal mortgages. The mortgage bubble had burst because borrowers that were targeted for subprime loans were considered to have a higher risk of defaulting on their loan, and unsurprisingly ended up defaulting on their loans. The culmination of the years leading up to the Financial Crisis of 2008 when banks were targeting these people with poor credit and offering them subprime mortgages they could not afford causing the borrowers to default led to the housing bubble finally reaching the point of no return and bursting. The mass foreclosures caused by the mass defaults on mortgages also led many to begin spending less and investors to lose confidence in Wall Street which made the economy drop deeper into a recession. This recession coupled with the subprime mortgage bubble burst led to the worst economic times that had occurred since the Great Depression. 

Unfortunately, the United States has not learned from the mistakes made in the years leading up to 2008. Currently, there is worry of another subprime lending bubble, but this time in the auto industry. In fact, John Oliver stated that, “nearly a quarter of all car loans are now of the high risk subprime variety. In fact, so many are being issued, they recently reached a ten-year high” (Oliver, Auto). Some believe that this subprime lending bubble will not be as devastating since auto loans make up for a less percentage of the economy than mortgages do. However, many others are unaware that they are making the same mistakes they made during the lead up to the Great Recession. Financial education would be a good way to prevent borrowers from making bad financial decisions and prevent them from hurting our economy with these poor decisions again.

Citizens are not aware of the harmful loans they are getting into because loan dealers are convincing them that the loans are beneficial. Unfortunately, these loans are usually not beneficial to the people that accept them, and these people are usually the citizens who struggle with money the most. John Oliver recently uncovered that, “people who have recently declared bankruptcy are being actively targeted through the mail” (Oliver, Auto) by subprime loan dealers. These people need the most help in order to get their finances back on track. However, they are also the main target by subprime loan dealers to accept loans they cannot afford that will end up being detrimental to their finances which prevents them from being able to get back on their feet. If personal finance was required in high schools, many of these citizens would be able to receive the education needed to make better financial decisions and avoid being convinced into accepting a loan that will not benefit them. 

Since 2008, there has been a renewed interest in providing and requiring personal finance classes in U.S. high schools. While personal finance classes are currently only required in a minority of states (North Carolina, Virginia, Florida, and Alabama are some of them), most adults, according to Page, believe that personal finance classes should be required with “Ninety-three percent of Americans [believing] all high school students should be required to take a class in financial education” (Page). Many students also want these classes with, “eighty-six percent of teens [indicating] they’d rather learn about money management in a class before making mistakes in the real world” (Page). Many students feel like they are thrown into the world after high school and are required to learn how to properly use a credit card and pay bills on their own. Current students have also witnessed the detrimental effects of student loans and saw how the Great Recession affected their families, so they now want to be more cautious with their finances. Meanwhile, these high school students have to take chemistry which a majority of them will never use in everyday life. The usefulness of personal finance is why it is so important. Personal finance would be used every single day by every single person, and that is where it differs from many required high school courses, such as chemistry and trigonometry. It is vital to these students’ lives that they understand personal financing, which is why personal finance classes should be required. Personal finance education would help the younger generations avoid mistakes that the previous generations had made, such as the subprime mortgage bubble that led to the Great Recession.

Currently, states do not have to require personal finance classes. Since there is no requirement, only “17… [states] require high school students to take a course in personal finance” (Schwartz). Many people believe that requiring economics classes is substantial enough to substitute a personal finance class. However, economics and personal finance are two completely different subjects. Economics is a social science that deals with the production, distribution, and consumption of commodities, and does not focus on management of one person or family’s finances like personal finance does. For example, a microeconomics class would focus on supply and demand and the basics of making decisions for a business given certain economic conditions. While this is useful information, an economics class will not teach students about credit cards or loans or retirement planning. These lessons are offered in personal finance classes, and cannot be crammed into an economics class. They must be put into a separate class of their own.

Some believe that a singular class of personal finance, on its own, would not prepare students enough to justify requiring one. However, FINRA, the Financial Industry Regulatory Authority, released data concluding that, “high school students who are required to take personal finance courses have better average credit scores and lower debt delinquency rates as young adults” (Schwartz). This shows that requiring a personal finance class in high school does indeed benefit the students. Not receiving personal finance education has been linked to, “lower rates of planning for retirement, lower rates of asset accumulation, using higher-cost financial services, lower participation in the stock market, and higher levels of debt” (Suiter et al.). While planning for retirement does not seem like something high school students need to learn about, it is important that these students understand the best ways to plan for retirement and to start early since we are living to increasingly older ages. 

Suiter mentions that students that were not required to take personal finance classes are at a higher risk of paying more for financial services. People who are seeking out professional financial advice need to watch out for financial advisors. John Oliver explains, “it is currently legal for financial advisors to put their own interests ahead of yours unless… they are what’s called a fiduciary” (Oliver, Retirement). A fiduciary is someone who is legally required to act in their client’s best interests, and would be the best option when looking for financial advice. Requiring a personal finance class would help students to make better financial decisions and help them avoid financial services that will not benefit them. 

Parents are usually who children are expected to turn to with financial questions, but “80 percent of Americans admit that they could benefit from advice and answers to everyday financial questions from a professional” (Bumpus). How can children be expected to learn sound financial practices from parents who are unsure about personal finance themselves? Parents usually just tell kids to save their money and that is the end of the conversation. They cannot be expected to teach smart financial practices to their children when they were part of the subprime mortgage problem in the years leading up to 2008. Therefore, children need to turn to schools for formal financial education. 

There is a big concern that requiring a new class would put unqualified teachers into this position. Kadlec shows that even teachers are worried about being required to teach a personal finance class when he states, “in surveys, just one in five teachers say they feel comfortable teaching about money” (Kadlec). Many teachers are afraid to teach personal finance because they do not fully grasp the concepts, and many teachers have made financial mistakes before. Parents have the right to be concerned with someone who has defaulted on a loan teaching their children personal finance. However, a school would not make a European history teacher teach a chemistry class. The school would either hire a new teacher with the proper credentials or could offer teachers an incentive to take the courses required to properly teach a personal finance class. Schools providing teachers incentives is not unheard of with some schools giving teachers pay raises if their classes have high test scores. Schools could also mimic the practices some businesses follow of helping their employees pay for education. While a school’s budget is limited, they could offer a few teachers help with paying for the tuition required to successfully teach a personal finance course. 

Another option to have a successful teacher would be to bring in professionals in the field to aid the teachers. A study done by the St. Louis Federal Reserve showed that, “students who were taught by an experienced instructor scored 15 percentage points higher than those not offered the curriculum” (Suiter et al.). This is up from “5-to-7 percentage points” (Suiter et al.) that students with a first year teacher received proving that as teachers gain experience, they become better at teaching the subject. Coleman talks about supplying the teachers with help in teaching the course when he mentions, “having a financial counselor or coach for a school district serve as a mentor for teachers as they learn the new curriculum” (Coleman). This would allow teachers to feel more confident teaching the material and help them pick up the course quicker. Coleman believes that financial counselors will be willing to provide these services because they would be able to market their business through the school and potentially increase their client base. 

Coleman also mentions that instead of having professionals aid the teacher, the teacher could coordinate with professionals in the field to come teach the class. Coleman quotes Crary discussing the benefits of this technique; "you could have a great class where you bring in parents and community members to discuss the best things they... learned about money” (Coleman QTD. Crary). The parents and community members would be people that either work in the personal finance field or have had personal success in the field. While this method is less common, it is the same as when a police officer comes into a class to talk about drivers education and would be a good way to teach students personal finance even if the only teacher available feels uneasy about teaching the course. 

The concern for the cost of adding a new course with an already thin school budget has stopped many schools from increasing the courses they offer. The Garrett County Schools superintendent remarks that, “adding course requirements at the state level usually means needing to hire additional staff and invest in textbooks or other educational tools” (Malcolm QTD. Wilson). While these costs may seem burdensome, many banks and private businesses have started providing funding for personal finance education. According to Malcolm, “Discover's Pathway to Financial Success grant program will donate $10 million over five years to high schools across the country to help start or expand on financial education curriculum (Malcolm). Discover is not the only business providing funds for personal finance; PricewaterhouseCoopers is another business that is financially assisting schools with, “a $60 million pledge, plus $100 million worth of volunteer hours” (Malcolm). The amount of money being provided by businesses to aid schools with supplying personal finance classes can tremendously help many schools start up or continue to fund the program. 

Banks and other businesses are not only providing funding, but are also supplying supplemental software to aid teachers and students. One example of this is from H&R Block which Page describes as, “a money management simulation that uses evidence-based learning strategies to educate teens about real-life budgeting” (Page). Software like this allows students to interact with money the way they would in the real world, but without any risks associated with making the wrong decision. These programs allow students to become comfortable with handling money and looking at contracts, so that they will be prepared when they encounter them in the real world. 

The best way to require a personal finance class would be by having the federal government mandate it. However, “there is no national curriculum in the United States” (USNEI), so the best possible way to get more states to require personal finance education would be to have Common Core pick up this class since “forty-two states… have adopted the Common Core State Standards” (Standards). If Common Core made personal finance classes part of its curriculum, forty-two states would start requiring this class, if they were not already one of the seventeen states requiring it. Also, by having the states follow a standard about what is supposed to be taught in a personal finance class, states would be able to avoid teaching the outdated financial techniques that are prevalent in the classes that do not have a standard to follow.

The major benefit of requiring personal finance classes is the independence future generations will feel once they have received financial education. Citizens will be less stressed when it comes to financials because they will not have to rely on others to inform them what their money situation looks like. This society will not have to worry about not knowing what their finances look like because they will be able to calculate them themselves. This is similar to when teens learn to drive. The teenager feels a sense of independence from learning a new skill that will benefit them for the rest of their lives. Students will gain a new sense of independence once they learn how to manage their own finances.
