I’ve been told by an economics professor on campus that her students recoil in horror when she goes through the details of how credit cards make their money; they simply didn’t know. (I can only imagine how they’d react to learning the details about payday lenders.) Young adults who’ve never dealt with insurance may not have any sense of what a “deductible” is -- the word always struck me as misleading -- or why it matters.The conversation in his comments section includes several observers suggesting that the proper place to equip the young with money management skills might be in high school. Or earlier.
If anything, I’m wondering if financial literacy might make a good substantive focus for a freshman seminar. Yes, it could cover student loans, but it should go well beyond that. As a subject, the relevance should be obvious. Better, it would allow students to exercise the various general education outcomes that most colleges profess: communication skills, critical thinking, and quantitative reasoning all leap to mind. The actual math involved may be relatively simple, but the way of looking at the world is both powerful and complex.
Perhaps there's a parallel with drug awareness programs. Although schools like to announce their drug-free-zone status, and controlled substances are controlled substance, the fact that "sale of a controlled substance" is a crime tells you everything you might want to know. Credit cards are also a controlled substance, of a different kind, and universities are, if not credit-card-free zones, they are credit-card-limited-promotion zones.
There's also plenty of classroom-tested, educationist-tweaked material for the elementary and high school curriculum. One such program, which I hereby affix my imprimatur as co-director of a Center for Economic Education to, is the Financial Fitness for Life curriculum. There are other approaches provided by the Council for Economic Education that a classroom teacher might consider.
There's also the possibility that tomorrow's successful collegians are already getting some of this preparation. During our spring break, I had the opportunity to observe recognition ceremonies at two Naperville schools where students took seven of the top eight places in the Invest Write national essay competition.
Two of those students attend Spring Brook Elementary School.
Five more, including the national winner in the fall essay competition, attend Fry Elementary School.
The young lady signing her picture recommended Honda as an investment. Earlier that day, she found out on national television that she was the national winner.
It's not the first time I've had occasion to help recognize Invest Write winners from Naperville.
Something our colleagues, whether at university or in K-12, ought understand is this. Naperville schools are under the same constraints as everyone else when it comes to testing, and to government mandates. The district is a well-off district (the standard plan for a new neighborhood school has to be a plan that blends in well in a subdivision of largish pricey houses) and the youngsters probably get a lot of support at home. I cannot rule out the possibility, though, that including personal finance skills in the curriculum augments whatever advantages growing up in a well-off neighborhood confers.