Spoiler alert: good things are happening!
We are delighted Dr. Welcome Carly Urban to the NGPF Blog to answer this important question. Carly will join Christian next Thursday (the 28th) in a panel discussion on the latest research into the state of financial education in 2022. You can register here.
†
The message from Dr. Carly Urban:
I’m a PhD economist researching the effects of financial education – you can also find me hunting snow in the mountains! I take over the NGPF blog from time to time to update you on new research in the field. I’ll tell you about interesting findings without getting shaky.
This post is simple and addresses the question: What Happens When States Need Personal Funding for High School Graduation?
Credit improves: credit scores rise and default rates fall. Use of alternative financial services is declining: fewer personal loans. Student loan decisions are improving: Loan shifts from high-cost (credit card debt, private student loans) to low-cost (Staffford loans, grants, and grants), and long-term student loan repayment rates are increasing for first-generation and low-income students. For some, subjective financial well-being improves: In general, those who need to complete financial education in high school feel better about their ability to meet daily and monthly financial goals. Those who have completed their education with a high school diploma see a decline in financial well-being because they say that because of money, they will never get the things they want in life. Pension saving remains unchanged: the chance of a pension savings account or amounts does not change at the age of 40.
Should We Be Concerned That Financial Education Doesn’t Affect Saving? Probably not! Requiring financial education improves credit, debt, and loan outcomes. It has less impact on savings. This makes sense! Students are about to embark on a journey in which they invest in themselves: their skills, knowledge and the discovery of their future career path. To save more, you may need to borrow more up front – or cut their income later. Plus, retirement savings is so tied to employers, it’s probably harder to get through education.
All the research to date takes into account what happens when states require personal funding before high school graduation (embedded in a different class, within a few different classes, or standalone courses). We know that less than half of schools in states with embedded personal finance mandates actually have the requirement. This means that states that require a full semester of personal finance are likely to have even greater impacts.
Bio: Dr. Carly Urban is an associate professor of economics at Montana State University, a research associate at the Institute of Labor Economics (IZA), and a research associate at the TIAA Institute. She has an entire page on her website devoted to financial education research, with the bulk of her work focusing on financial education in schools. When not at work, she usually spends her time having adventures in the mountains with her husband or her dogs, Cannon and Panda.
†
Interested in learning more about accessing financial education in your state and community. View the NGPF Got Finance? School search card!
This post dr. Carly Urban Guest Post: What Happens When States Guarantee Personal Finances For ALL High School Students?
was original published at “https://www.ngpf.org/blog/advocacy/dr-carly-urban-guest-post-what-happens-when-states-guarantee-personal-finance-for-all-high-schoolers/”
