Virginia's Financial Literacy Law Has First Graduates
Students in Virginia's class of 2015 are the first in that state to graduate under a mandate that they take a full credit of personal finance and economics.
They were the guinea pigs for the 2009 law that made the stand-alone class a graduation requirement. More than 90,000 graduates are now going out into the world with those classes under their belts. It is unclear for now, however, how the state will measure the success of its program. That accountability will be important as more states look to add similar measures to their law books.
Virginia is one of just a few states that requires students take stand-alone classes in financial literacy and economics. Tennessee is another. Virginia's law was passed in 2009 amid deep concern about the economy. Students who entered the 9th grade in 2011 were the first who were required to complete the course in personal finance and economic literacy in order to graduate.
Here is a Q&A about the law.
The proposal received some pushback from critics concerned about the loss of local control and raised some fear that students would have to sacrifice other electives. To address scheduling concerns, the state allows students to take the courses during the summer or online if they choose, although some districts charge students a fee to do so. The Virginia Council on Economic Education says the majority of students still opt for the regular classroom session.
The council's officials told me they have high hopes for the program.
"My belief is that every year with 90,000 students having this sort of knowledge, it will ultimately improve Virginia's economy," said Daniel Mortensen, the organization's executive director. He pointed to several studies, including one released in January by the Finra Foundation, that show the benefits of such courses. He also highlighted results from the New York-based nonprofit Working in Support of Education, which offers students a financial literacy certification test. When the organization released its national ranking of the top 100 high schools in personal finance education, 38 of them were from Virginia.
"In my mind, this ought to be something that is exported and catches on in all 50 states," said Mortensen of the requirement. "As important as STEM (science, technology, engineering, and math) subjects are, we believe this sort of training provides all students with essential life skills that they can use regardless of their vocation. It really levels the playing field for all students, even those students who might come from different socioeconomic backgrounds."
Such mandates are rare. Florida was the latest state to propose a mandatory financial literacy course, but last week the governor shot down that idea.
One common barrier to such mandates is cost. In Virginia, the Council on Economic Education, the law's biggest cheerleader, has raised about $1.4 million for teacher training.
It's also worth noting that in Virginia, the law specifically requires stand-alone classes. Many states require schools teach financial literacy and economics, but the material is embedded in other courses.