State Launches Effort to Spur Financial Literacy Among High Schoolers
By Gabrielle Gurley for the State House News Service
       High school students lack the financial savvy to make informed money management decisions and a new statewide program outlined Tuesday will teach young people the skills they need to better handle their money.
        Known as "Hi-Fi," the program launched by the state Office of Consumer Affairs and the Department of Education aims to bring a voluntary financial literacy curriculum into high schools statewide. Distributed to 136 high schools, from Taunton to Southbridge, South Hadley, Leicester, Charlestown and Chelmsford, "Hi-Fi" will reach 10,000 students in the next school year, according to consumer affairs officials.
The course will be taught in grades 11 and 12 to students who have
completed their MCAS requirements.
        "Teaching students the ABCs of managing money will benefit them throughout life. Many students after graduation don’t know how to file tax returns, establish good credit or apply for a bank loan," Gov. Mitt Romney said in a statement.
        The average American teenager spends about $5,400 every year, and teens overall spent about $175 billion in 2003, according to National Endowment for Financial Education (NEFE), and Teenage Research Unlimited figures.
        Since 1997, nationwide surveys of high school seniors’ personal financial knowledge have consistently yielded poor results, with more than 50 percent of students earning failing marks. Only 6 percent of seniors in 33 states scored a "C" or better on the 2004 survey by the Jump$tart Coalition for Personal Financial Literacy.
        "There is unprecedented debt among young people right now," said Heidi Perlman, spokeswoman for the Department of Education. "They are going into college with debt. It is critical for students to get a strong foundation at an early age on how to manage finances."
        Launched in 1984, the six-unit NEFE curriculum, used in 20,000 schools across the country, addresses financial planning, budgeting, savings, investment options, credit and insurance basics. Funded by NEFE, a non-profit foundation helping Americans to acquire information and to gain skills to manage their personal finances, the program will be offered at no cost to Massachusetts.
        Office of Consumer Affairs Director Beth Lindstrom said many of the
consumer problems her agencies confront, such as predatory lending schemes, could be prevented with basic financial training. "If people were taught early on, they would not fall prey to these types of predatory loans." She added consumers also could avoid "paycheck to paycheck" lifestyles with basic education.
        Piloted at Stonehan High School, 125 marketing students took the "Hi-Fi" elective course offered by teacher Deb Deacon, a marketing and business management specialist. A 17-year veteran, Deacon had always taught some basic elements of financial management in her classes, such as balancing a checkbook.
        She said "Hi-Fi" has a very realistic approach to students’ lives now.
Deacon’s students all have cell phones and many are responsible for the
monthly bill. Others drive cars and pay their own car insurance.
        In Deacon’s class, students learn about identity theft, health insurance, and spending versus saving. Even so, young people, she added, "don’t really appreciate what it takes to live on their own."
Deacon said the best lesson was about credit cards. Students discovered it is easy to get into debt, and, once in debt, hard to make payments.
Deacon also shared her own personal struggle with credit card debt: after
college, in addition to her student loans, she had racked up $7,000 in
bills. Deacon took seven years to pay off her debt and another 10 to finish
paying her student loans.
        After the lesson, "no one wanted to get a credit card," said Deacon.
Young adult households (ages 18-24) spend nearly 30 cents on every dollar servicing debt, according to Demos, a New York public policy and advocacy group.
        Before taking the class, Stoneham High senior and Stop & Shop employee Mario D’Alelio, 18, said he had been living paycheck to paycheck. Now the Suffolk University-bound student deposits his pay directly into a checking account and divides his money into three categories: savings, checking, and spending.
        "Everyone I talk to says that we wish we had this in high school," said Lindstrom. "I would love to see something in the mandated curriculum," she added. "Maybe down the road we could be successful. "
        "Hi-Fi" should be a graduation requirement, Deacon believes. "Ideally, every student should take classes in financial management," she said. Perlman said education reform mandates have clear subject guidelines and the Department of Education is not looking at adding personal financial management courses to state level requirements. Cities and towns do have their own individual graduation requirements and could consider looking into it, she added.
        "Hi-Fi" meets state curriculum frameworks requirements. The Office of
Consumer Affairs serves as the "Hi-Fi" program coordinator, distributing
free NEFE course workbooks and teacher manuals to participating high
schools. Teachers earn professional development points toward
re-accreditation for teaching the course. Four free May training sessions
are scheduled in Boston, Brockton, Lawrence, and Worcester.
Consumer Affairs also hopes to secure funding for additional teacher
training from civic and business leaders. The office also has created a
partnership with the state banking, credit union and mortgage associations as well as regional workforce investment boards to form a speakers’ bureau network to supplement classroom instruction.
        Headed to Bay State College in the fall, Stoneham High senior Cristina Coppola, 18, said "Hi-Fi" taught her to "save money early and invest." She plans to hold off on getting a credit card during her freshman year.