Why Is America Struggling With Financial Literacy?

According to PEW, the U.S. household debt has reached $13.2 trillion in the first quarter of 2018, which is higher than what it was during the 2008 financial crisis. Additionally, student loan debt has reached a record high of $1.5 trillion in the first quarter of 2018.

Does America’s increasing debt have something to do with the fact that only 17 out of the 50 states have personal finance as a prerequisite for high school graduation?

Kentucky is one of the states that’s behind in financial literacy. They have the eighth-highest personal bankruptcy rate in the U.S., with 345 bankruptcy filings per 100,000 residents.

PEW relates that last year, Kentucky’s state Treasurer Allison Ball spoke to high school seniors about credit cards and finance, but saw that the information being relayed to them was met with blank stares. She attributes that to the fact that one week before graduation, the students were unaware of what the term “interest” even meant.

In 2020, Kentucky will require incoming high school freshmen to take a financial literacy course before they graduate. In the course, students will learn how to understand and manage their credit, create a budget, take out a loan for a large purchase, and even how to save for retirement.

It took six years for Kentucky policymakers to finally bring this financial literacy measure into law. Though there are no studies to prove how financial literacy classes affect students as they transition into adulthood, Kentucky state officials are hopeful that by investing in their students, they will bring about a change for the state’s financial status.

Maryland is one of the states whose Board of Education, in 2011, set financial literacy standards for grades 3 through 12. However, whether or not these standards are implemented has been left up to each school district. For more information about the state of financial literacy in Maryland, tune into last week’s Facebook Live to hear from the State of MD Financial Literacy Committee.

What do you think — should financial literacy be a required high school prerequisite around the country? Leave your thoughts in the comments below!