This October is the first-ever National Economic Education Month! Learn how to celebrate

The work of the President’s Advisory Council on Financial Capability for Young Americans

POSTED: April 14, 2014 | BY: Annamarie Cerreta | TAGS: , , , , , , ,

April 14By Beth Kobliner, Member of the President’s Advisory Council on Financial Capability for Young Americans; Author of the New York Times bestseller Get a Financial Life.

I certainly hope I’m wrong about this one.

But when results from the first PISA international test of financial literacy are released in July, I have a sneaking suspicion that the financial know-how of young Americans will be disappointingly low when stacked up against their peers around the world. But hey: If that turns out to be true, let’s not blame a bunch of 15-year-old kids (they’re the ones who took this Program for International Student Assessment test back in 2012). No, we grown-ups should be pointing the finger right back at ourselves. The fact is we are not adequately preparing our kids for a financial literacy test—or, more importantly, for the real-life tests to come as these young adults make their way in a complex financial world. Thanks to the CEE’s annual Survey of the States, we know that while four additional states now require students to study personal finance, that makes just 17 states total.

We can do better—and we will do better.

Now comes Financial Literacy Month, an annual opportunity to increase recognition of this financial education problem, and to propose ways to address it. I am really proud to be a member of the President’s Advisory Council on Financial Capability for Young Americans, which began its work last month. We held a rousing meeting at the Treasury Department that featured eloquent and impassioned speeches from the 17 Council members, as well as Treasury Secretary Jack Lew, Education Secretary Arne Duncan, Consumer Financial Protection Bureau Director Richard Cordray, White House Domestic Policy Council Director Cecilia Muñoz, and Valerie Jarrett, Senior Advisor to President Obama.

With such star power in the room that morning, and so many sincere commitments being pledged to financially empower young people, it was clear that the administration is serious about tackling this issue. I was so impressed by the Council’s membership: a sharp group of public servants, corporate executives, not-for-profit leaders, and innovators from the tech and education sectors. Our Chair is John Rogers, CEO of Ariel Investments, who also chaired the previous Council on which I served, and our Vice Chair is San Francisco Treasurer José Cisneros.

During their introductory remarks, my fellow Council members presented a range of ideas to connect children and families with the information they need, such as integrating financial education into the Common Core, equipping families to pay for college by encouraging city-wide kindergarten savings programs like Cisneros’s in San Francisco, and delving into the role that mobile technology plays in the spending habits of young people.

I cited two issues the Council should take on in particular:

1. Increase college enrollment by getting more families to fill out the FAFSA—the Free Application for Federal Student Aid.

Each year, more than a million high school seniors miss out on grant money by failing to submit this sometimes demanding form. Meanwhile, there is evidence that getting a professional to help a family fill out the FAFSA can boost college enrollment by 20%. I’d like this Council to help create a FAFSA Corps (think Peace Corps or AmeriCorps) to teach families how to fill out the FAFSA. Let’s incentivize colleges to use work-study dollars to train even more college students to help. And let’s spread the word to high school counselors who may not know about the new Financial Aid Toolkit, a comprehensive resource just for them.

2. Get financial literacy content onto the Universal Pre-K bandwagon.

Research by Karen Holden at University of Wisconsin-Madison has demonstrated that even preschoolers have the capacity to grasp basic financial concepts like value and exchange, delayed gratification, and choices. By enlisting educators, behavioral economists, and gamification experts, this Council can help connect a new generation of preschoolers—particularly kids from lower- and middle-income backgrounds—with an engaging and effective financial education curriculum. Where there is political will, there is a way: President Obama has cited the need for Universal Pre-K in each of his last two State of the Union addresses.

It is inspiring during this important month to be in a position to help make financial empowerment possible for our kids through the Council’s work. As we get down to the business of turning our ideas into recommendations for the President, please feel free to contact me with any further thoughts.

Post a Comment

No Comments