Editorial: Personal finance course requirement makes sense

Indiana lawmakers have been debating numerous school reform proposals this session, but one seems especially needed and beneficial: making sure that young people graduate high school with at least some measure of financial literacy.

Senate Bill 35 would add a personal finance course requirement in high school. We believe such real-world education should be required as part of every student’s high school experience.

Prospects for this bill’s passage appear to be sound. Last week, it sailed through the Senate Committee on Education and Career Development with bipartisan support and sailed through the Senate this week.

The measure would provide instruction on matters including money management, spending and saving, types of bank accounts, income taxes, credit and credit scores and more.

If enacted, Indiana would join 15 other states, including Michigan and Ohio, that now require a personal finance course for graduation, according to a report from Next Gen Personal Finance, Chalkbeat Indiana reported. Next Gen found that nationwide, schools where most students are students of color — as well as those where most students receive federally subsidized meals — were far less likely to have a guaranteed personal finance course than whiter and wealthier school districts.

Next Gen also reported that about 11% of Indiana students are currently enrolled in schools that require a semester-long course dedicated to personal finance, so this is by no means an entirely new concept. The idea gained further Statehouse support after the Interim Study Committee on Education last fall recommended the state pursue a personal finance course requirement.

Meanwhile, the number Indiana high school graduates going to college is plummeting. This summer, the Indiana Department of Education reported that for the Class of 2020, just 53% of graduates went on to college. That’s a steep decline from the 65% who did in 2015.

Ironically, requiring a financial literacy course could be one way to reverse the declining college-going rate among Hoosier high school graduates. How so? We suspect that as part of this curriculum, students might learn:

  • Workers with a bachelor’s degree had median weekly earnings of $1,310 in 2020. By comparison, workers with only a high school degree had median weekly earnings of $781, according to the US Bureau of Labor Statistics.
  • Men with bachelor’s degrees earn about $900,000 more in median lifetime income than high school graduates, while women with bachelor’s degrees earn $630,000 more, according to the Social Security Administration.

Yet here is another lesson: More money alone does not buy financial security. A Forbes commentator recently pointed to research indicating that even among families earing $150,000 to $200,000 a year, more than 40% reported they were living paycheck to paycheck. As are most Americans: CNBC reported this year that more than 63% of Americans say they live paycheck to paycheck.

Safe to say, most current working adults never had to take a course like this in high school. Yet high school seems the ideal place to start. We can think of few courses to offer young people that would better serve them on a day-to-day basis during their adult lives.