Visa and the Council for Economic Education team up to support student financial literacy
Visa announced in late March that it is co-founding a coalition of community leaders, non-profits, and corporate partners called FinEd 50 in partnership with the Council for Economic Education (CEE). The goal of FinEd 50 is to improve access to quality financial education for students in the US.
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According to the CEE's 2022 survey, which measured the economic and personal finance education taught in US schools, only 27 states mandate a personal finance course for students, and those courses vary in quality.
"America is failing our children when we don't provide them with opportunities to study critical economic and personal finance concepts before they leave high school for college, for jobs, and for their futures," said Nan J. Morrison, president and CEO of CEE, in the press release. "While we're encouraged by some progress in our latest Survey, all young people across the country need more and deserve better."
According to the council, financial education is an essential part of young people's education. Using digital channels and classroom lessons to support financial literacy will set them up to properly budget themselves and position them to make good financial decisions. This seems especially important for college-bound students as they prepare to take on student loans.
The National Financial Educators Council (NFEC) recently revealed the results of their tests that measure financial literacy across several age groups. The Student Loan Test found that, of the 8,904 college students and college-bound students that participated, there was a failure rate of 66% and an average score of 59%.
Also: Everyone from Gen Z to Boomers could use more financial education: NFEC study
The test's questions cover a variety of student loan-related topics, like what's the best student loan type to choose, what is forbearance and deferment, and what are the consequences of defaulting on the loan, among others. Considering the questions asked, the results become even more worrisome.
"For many graduates, achieving the dream of earning a college degree comes with student loan debt that can derail their finances. Today's youth are consistently encouraged to go to college, but never receive a financial education. Consequently, they make the biggest investment of their life to date with little or no knowledge about how to evaluate student loan choices, and no plan to pay back the money they borrow," Vince Shorb, NFEC CEO, said on the test result page.
With the formation of the FinEd 50, Visa and the CEE hope to change these results. According to the press release, the coalition has four main goals:
- Generate state-level action to ensure every student has access to equitable personal finance courses
- Ensure curriculums adhere to the National Standards for Personal Financial Education
- Provide educators with professional development via "innovating funding mechanisms"
- Provide a tool to track access and ensure program equity
"The state of financial education offered to students in the US varies significantly. Where students live should not impact whether they have access to knowledge that will help them learn how to make informed financial decisions in their lives," said Worku Gachou, head of North America, inclusive impact & sustainability, at Visa in the release.