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A proposal by state Treasurer Deborah Goldberg would mandate schools incorporate financial literacy education throughout their curriculums.
Unlike children in about half of U.S. states, students in Massachusetts do not have to learn about personal financial topics in school, and that could be hurting less-affluent communities.
Schools often promote financial literacy for students, including through initiatives offered in collaboration with community banks and credit unions.
But even within school districts, financial education is rarely required. A survey of 33 Massachusetts school districts by the state’s Office of Economic Empowerment found that 73 percent did not require schools to provide personal financial literacy.
That could change. Massachusetts Treasurer Deborah Goldberg has filed a bill with the state legislature that would make financial education mandatory for Massachusetts schools, a move that could have long-term and wide-ranging effects.
“In order to have consistent economic stability, which then creates opportunity for individuals, which is a positive thing for everyone – including the financial condition of our state – you have to understand what you’re dealing with,” Goldberg told Banker & Tradesman. “Everyone needs the financial skills that you need to survive, because financial ruin is one the biggest issues that harms individuals and families – and then communities.”
Legislative Momentum
In a report released this month, “Personal Financial Literacy Education in the Massachusetts Public School System,” the Office of Economic Empowerment referenced several studies that have found that improved financial education in high school could better equip young adults to budget, build wealth and be savvier borrowers as they move into adulthood, which the report identified as critical issues for lower-income communities of color.
Massachusetts did enact a law in 2019 that requires the Department of Elementary and Secondary Education to provide resources to help schools offer personal financial education, but schools are not required to provide instruction. And Massachusetts is one of only 12 states that do not require school districts to implement financial education standards, according to the New York-based Council for Economic Education.
Goldberg’s bill, H.42, and a companion Senate bill filed by Sens. Patrick O’Connor, R-Weymouth, and Sal DiDomenico, D-Everett, would not require a standalone course. Instead personal finance would be worked into other courses such as math, history, social sciences, business or technology. The bill also establishes a fund called the Literacy Trust Fund to pay for the initiative, stocked with money appropriated by the legislature and private donations.
If the proposed legislation is enacted, the Department of Elementary and Secondary Education would have one year to develop a curriculum, for high schools and elementary grades. The proposed trust fund would also pay for training these teachers on the curriculum. Goldberg said the Office of Economic Empowerment’s study showed that some teachers wanted to include financial education in their classes but might feel uncomfortable with the topics.
Pandemic, Inequality Highlight Need
The treasurer’s office offers initiatives to promote financial literacy and other economic programs – often in partnership with community banks and credit unions – through the Office of Economic Empowerment, which was established in 2015. A 501(c)(3) fund, the Economic Empowerment Trust Fund, provides money for these programs and has received donations from several banks, including Citizens, HarborOne Bank, People’s United Bank, Monson Savings Bank, Santander Bank and Webster Five.
The financial struggles brought on by the pandemic, as well as ongoing racial inequities, have highlighted the need for required financial education, Goldberg said, and the subprime mortgage crisis 10 years ago “signaled to me that we have completely lost sight of basic financial skills that people need to survive.”
Without a mandate, Goldberg said, the Office of Economic Empowerment’s study showed that personal finance courses were more likely offered in affluent communities because the schools could pay for the programs. She added that affluent communities were also more likely to have this coursework because parents with higher levels of education understood the significance of financial literacy and pushed to have the courses offered.
A hearing on Goldberg’s bill was held in September before the Joint Committee on Education, and was supported by the Black Economic Council of Massachusetts.
Jodie Gerulaitis, a longtime advocate for financial literacy and the vice president of community relations at Ware-based Country Bank, supports the bill and said she was cautiously optimistic that it would pass in the current legislative session.
Diane McLaughlin
Before the pandemic, Country Bank provided in-person financial education at elementary schools and partnered with 12 high schools on Credit for Life fairs. When the pandemic shut down credit for life fairs, Country Bank collaborated with seven other banks to sponsor a virtual version of the fair that launched in the spring so that seniors would not miss out on the experience.
If financial education does become mandated for school districts, Gerulaitis said she still sees a role for community institutions to collaborate with schools on projects and enhance the curriculum offered in classrooms.
She added that the current environment, including the pandemic and even the recent increase in the price of goods, offered a significant opportunity to help children understand the importance of finances.
“I’ve seen the uptick in the priority and the focus on financial education because when this pandemic hit, people were in trouble,” Gerulaitis said. “Now you see even those younger generations wanting to save more.”
