A personal finance course in high school can provide students with invaluable, real-world lessons on topics like budgeting, investing, credit, and more. This type of financial education aims to equip students with knowledge and skills that they can apply throughout their adult lives. Thanks to a recent push at the state government level, over half of American high schoolers will soon have access to such a course.
On December 13th, 2023, Pennsylvania became the 25th state to pass legislation mandating a standalone financial literacy course as a high school graduation requirement. Beginning in fall 2026, Keystone State schools must provide students in 9th through 12th grades with semester-long personal finance training. Governor Josh Shapiro signed the mandate into law this week as part of a larger omnibus bill.
The Keystone State joins 24 others on a growing list of states prioritizing financial education. Per nonprofit Next Gen Personal Finance (NGPF), 53% of high school students nationwide now enjoy guaranteed access to a personal finance course before they graduate. Just seven years ago, only 5.4% could say the same.
This rapid expansion stems largely from an increasing awareness of Americans’ financial illiteracy. The COVID-19 pandemic and corresponding economic crisis underscored how few U.S. adults grasp basic monetary concepts. In hopes of equipping the next generation with smarter financial behaviors, more state governments are intervening to make financial literacy a staple of the high school experience.
So far in 2023, governors and legislators in eight different states have passed laws to that effect. Of those, Wisconsin represents one of the most recent. Earlier this month, Governor Tony Evers approved a bill requiring all high schoolers in the Badger State to complete a personal finance course for graduation eligibility starting in 2028.
“We have to make sure our kids have the tools and skills to make smart financial and budgeting decisions to prepare for their future,” Evers stated. “So ensuring our kids have strong financial literacy is essential to setting them up for success as adults.”
Which States Are Leading the Charge?
According to the latest report card from Vermont’s Center for Financial Literacy at Champlain College, seven states have already implemented robust financial education graduation prerequisites. Alabama, Iowa, Mississippi, Missouri, Tennessee, Utah, and Virginia earned top marks for guaranteeing the Class of 2023 completed a dedicated personal finance course in high school.
By 2028, up to 25 states could share that honor as recently passed bills and policies take effect. “Tremendous change is on the horizon,” said John Pelletier, Director of Champlain’s Center for Financial Literacy. “States are rapidly passing laws and changing regulations.”
The push makes sense considering how impactful mandated financial literacy courses can be. Studies show that students who complete them often make smarter monetary decisions down the road. This includes improving their credit, decreasing loan delinquency, avoiding predatory payday loans, and borrowing responsibly for college.
Which States Still Lag Behind?
On the other end of the spectrum, four states and Washington D.C. flunked Champlain College’s latest report card for their lack of financial education requirements. California, Connecticut, Massachusetts, and South Dakota received failing “F” grades.
However, advocacy groups in those states continue lobbying for better financial literacy policies. “We are currently collecting signatures in support of financial education for all high schoolers,” said Tim Ranzetta, Co-Founder of NGPF, based in California. “We are far outpacing our estimates, demonstrating what we all inherently know: that personal finance is an impactful and easy-to-implement course with strong demand from both students, parents and the general public.”
Why Good Financial Habits Matter from a Young Age
Experts argue that receiving financial education by high school graduation is crucial because of how early monetary habits form. “Once you graduate from high school, not a day will go by that you don’t think about money,” Pelletier explained, “how to make it, how to spend it, how to save it. You will be thinking about this until the day you die.”
Without proper training, young adults often stumble when first managing their own finances after secondary school. Many lack awareness of how to budget, build credit responsibly, leverage smart debt products like student loans, and avoid predatory lending practices. Some even turn to payday loans and go into deep debt due to poor financial literacy.
State-mandated courses aim to curb such issues by covering real-life topics like:
- Earning income
- Budgeting and monitoring spending
- Saving and investing money
- Understanding credit scores
- Managing debt and loans
- Identifying financial products and services
Arming students with this knowledge helps set them up for financial stability long after graduation.
Why Relying on Local School Districts Isn’t Enough
Another key argument for statewide mandates is that they help close socioeconomic gaps in access to financial education. Previously, offering a personal finance course was left up to each individual school district across the country. Understandably, more affluent districts were far more likely to already teach financial literacy.
“If you leave it up to local control, the districts most likely to unilaterally do this locally, they’re white, and they’re rich,” Pelletier explained. “So you would argue the folks that need it the most are the least likely to get it unless the state requires everyone gets it.”
State-level graduation requirements aim to balance that inequity. Regardless of their background, all students can gain the same foundational understanding of personal finance.
The pandemic also helped shine a light on just how financially fragile many American households are. That revelation triggered more governors and state legislators to prioritize financial education as a critical step toward securing constituents’ futures.
Looking Ahead
In today’s complex economic environment, managing money wisely is more crucial than ever before. However, financial literacy still remains pitifully low across U.S. adults. Putting students on stronger financial footing from a younger age could help curb poor monetary decisions down the road.
If all goes accordingly, we stand to raise an entire generation better equipped to budget responsibly, leverage debt judiciously, save sufficiently for retirement, and avoid predatory financial products. Those capabilities will empower them to build wealth and achieve financial freedom.
With over half of American high schools now offering financial education, we’ve made excellent progress. But more work remains to prepare all students for the economic realities they’ll face as adults. Expect financial literacy courses to continue expanding until personal finance training is as universal as subjects like math or English. Because just like those core competencies, managing money is an essential life skill.
