Balancing the books: Financial education could become a graduation requirement in Washington

A bill to make financial education a high school graduation requirement is making its way through the Washington state Legislature in Olympia.

Washington State Rep. Skyler Rude (R-Walla Walla) sponsored House Bill 1915, which passed unanimously out of the House of Representatives on Feb. 8. Now it awaits action in the Senate.

"Ultimately, I'm hoping that high school students exit K-12 much better prepared to make responsible decisions that empower them to be more successful in their personal lives and not waste money," Rude told KUOW.

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HB 1915 would require high schools to provide a half-credit of financial education instruction by the 2027-28 school year. The bill would not increase the 24 credits required for students to graduate. Rather, it gives schools flexibility in how students get that half-credit, either through a stand-alone course or embedded into other courses.

For example, Rude said at least one school district folds financial instruction into an algebra class, so students learn "financial algebra" while satisfying another math requirement.

Rude's bill has won the support of at least one Washington student, Ashwin Joshi, who testified in support of the bill on Jan. 15.

"Most of us are brought up learning that we need money to survive, but not learning how to manage money to thrive," Joshi told lawmakers. "But with this bill, we make sure financial literacy is a fundamental right to all students. We not only create a better future for our youth going forward, we create better futures for their future families as well."

Despite the unanimous support the bill won in the House, some concerns have been raised about the bill's approach.

Aaron O'Neal is a chartered financial consultant, an educator, and now, a financial podcaster. He knows how confusing the U.S. financial system can be, especially for young people. All too often, he said, people get their first look at a 401k package and think, "What the hell is this?"

"I think that's part of my beef with education in the whole financial system. That information is not easy to access," he said. "And when you do access that, are you getting the right information?"

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Young people may turn to the internet to find the answers they're looking for, and he said that can lead them to potentially exploitative sources.

"Education in financial services belongs in classrooms, because I don't think [students] are getting it at home. But who provides that?" he said. "Historically, banks and everyone else were clamoring to do that, because they want their brand in — they want to get these kids early, they want to install that brand. I've always thought that's not the best approach."

O'Neal said financial literacy curriculum needs to be created by an objective third-party that isn't also trying to sell students something. Not only that, he said, but that third-party also has to be able to create engaging curriculum that sticks.

That's a tall order, according to O'Neal, who has himself been tapped to develop financial education curriculum.

Washington schools do have the benefit of resources already developed by the Financial Education Public-Private Partnership. According to the state's Office of Superintendent of Public Instruction, or OSPI, the FEPPP committee "brings together individuals from both the public and private sector in an effort to provide quality financial education for students in the public school system."

In other words, FEPPP provides Washington school districts with instructional materials for financial education and trains teachers to apply those materials in the classroom. Pam Whalley, associate director of FEPPP, also told The Seattle Times that the program performs "bias and sensitivity analysis" of curriculum used in schools.

(By the way, FEPPP offers financial training materials to anyone, including adults. Resources are available online.)

Rude said schools can choose to use the FEPPP materials or other curriculum that meets the state's standards for financial education.

And yes, as the name implies, financial institutions were part of developing the FEPPP.

"I think there's a place for those institutions to participate," Rude said. "But the bill wouldn't necessarily require that they're involved in developing the curriculum."

Beyond who creates the curriculum, O'Neal questions whether a credit requirement and testing students on financial knowledge is the right way to go.

"Are those tests going to be fair?" he said. "Standardized tests have a lot of limitations for socioeconomic and ethnic considerations. They don't always truly reflect who's absorbed what and how that information is being learned."

Rude said he's personally a proponent of standardized testing, but beyond that, schools will be able to choose how exactly to measure their students' financial literacy. That could involve competency-based instruction or mastery-based instruction, the latter of which would be measured "through demonstration projects versus a [test]," he said.

Rude's proposal still needs the Senate's approval, though. It's been assigned to the Senate Early Learning and K-12 Education Committee, where it needs to be heard before the full Senate can vote on it. A hearing date has not yet been scheduled.