The One Subject Schools Need to Teach
By Ryan Wang
Written Fri October 30, 2020
Updated 2:10 AM ET, Sun March 21, 2021
"When are we ever going to use this?"
I hear this phrase being repeated countless times throughout my experience at school. Whether it’s in hushed conversations during lectures or over facetime homework sessions, these eight words never fail to show up. Although I consider myself as someone who loves to learn for the sake of learning, I admit that I occasionally find this phrase creeping into my mind as well. However unpleasant or discouraging it may be to both teachers and students alike, this phrase is a sign of a deeper problem in the American educational system. A deconstruction of the phrase reveals what students really mean to say: “how does what we are learning today prepare me for my future tomorrow?” Students are feeling ill-prepared to enter the workforce as they exit out of secondary and higher education. While the symptoms of this problem have already heavily impacted our economy and society, there is a simple solution in front of our eyes: the implementation of financial literacy courses in secondary education.
Financial literacy, as defined by Cambridge Dictionary, is the ability to understand basic principles of business and finance (Cambridge). This ability allows for the understanding and effective usage of various financial skills such as personal financial management, investment, and budgeting. In an age where increasingly complex financial products are becoming available to a growing range of the population, financial literacy has never been more important. However, a three-year study from the FINRA Foundation showed a “clear trend of declining financial literacy.” According to the study, the percentage of people who could correctly answer most questions about interest rates, inflation, bond prices, financial risk, and mortgage rates dropped from 42% in 2009 to 34% in 2018 (Keshner). All in all, younger Americans are becoming less and less fiscally responsible than their parents, a dangerous trend that has already reared its ugly head in our economy and society.
The significant level of financial illiteracy can be traced to many of the socioeconomic issues plaguing the nation today. As of 2020, student loan debt has hit a record of $1.6 trillion (Friedman), nearly 8% of America’s GDP. The wealth gap between America’s richest and poorer families more than doubled from 1989 to 2016 (Schaeffer). Millennials, the newest generation to enter the workforce, have the lowest credit scores of any preceding generation (Stolba). It is clear that the inability to be fiscally responsible and properly manage finances is exacerbating socioeconomic inequality and burdening lower-class Americans with debt and insufficient credit.
Although the devastating effects of this problem have done a considerable amount of damage to our nation’s social fabric and economic prowess, taking on the problem head on through education can help alleviate the issue. Increasing an emphasis on financial literacy and economics in our nation’s educational system will pave the way for greater understanding and competency among the younger generations as they prepare to enter the workforce. However, the country has yet to take heed. In fact, education in general has been a diminishing priority for the government. The American Federation of Teachers reports that 25 states had less funding for K-12 schools in 2016 than they did before the Great Recession (Weingarten). In addition, most states do not require financial literacy classes for high school graduation. Only five states—Alabama, Missouri, Tennessee, Utah, and Virginia—require high school students to take at least a one semester (half-year) personal finance course as a graduation requirement (Berman). This signifies that most American students aren’t learning about essential topics like using credit responsibly, investing in assets, saving for retirement, and navigating important financial decisions such as taking out student loans or mortgaging a home.
Whether we know it or not, the lack of financial literacy education in our nation’s educational system will continue to wreak socioeconomic havoc. The issues of economic inequality in age, gender, and race are exacerbated as financial literacy rates continue to fall across the nation. As we currently witness the growing divisions of the social fabric, the time has come to enact a greater focus on financial literacy in our educational policy.
Berman, Jillian. “Only Five States Require High School Students to Take a Class about Money.” MarketWatch, MarketWatch, 20 Oct. 2015, www.marketwatch.com/story/teaching-about-money-does-your-state-make-the-grade-2015-10-20.
Cambridge. “Financial Literacy: Definition in the Cambridge English Dictionary.” FINANCIAL LITERACY | Definition in the Cambridge English Dictionary, Cambridge University Press, dictionary.cambridge.org/us/dictionary/english/financial-literacy.
Friedman, Zack. “Student Loan Debt Statistics In 2020: A Record $1.6 Trillion.” Forbes, Forbes Magazine, 5 Feb. 2020, www.forbes.com/sites/zackfriedman/2020/02/03/student-loan-debt-statistics/.
Keshner, Andrew. “Financial Literacy Skills Have Taken a Nose Dive since the Great Recession.” MarketWatch, MarketWatch, 27 June 2019, www.marketwatch.com/story/americans-financial-literacy-skills-have-plummeted-since-the-great-recession-2019-06-26.
Schaeffer, Katherine. “6 Facts about Economic Inequality in the U.S.” Pew Research Center, Pew Research Center, 31 May 2020, www.pewresearch.org/fact-tank/2020/02/07/6-facts-about-economic-inequality-in-the-u-s/.
Stolba, Stefan Lembo. “Millennials and Credit: The Struggle Is Real.” Experian, Experian, 4 Apr. 2019, www.experian.com/blogs/ask-experian/taking-a-look-at-millennial-credit-scores/?pc=sem_exp_adnet.
Weingarten, Randi. “A Decade of Neglect: Public Education Funding in the Aftermath of the Great Recession.” American Federation of Teachers, AFT - A Union of Professionals, www.aft.org/sites/default/files/decade-of-neglect-2018.pdf.
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