For those who lived through the Great Depression of the 20th century, paying cash became the standard. They taught their children to avoid debt and to save if at all possible. The years went by. With steady work and rising wages, appetites for the good life grew. Credit became easier to obtain for buying new cars and bigger homes. Credit cards and their inviting perks made it possible to purchase almost everything on loan. Then, in 2008,
Armageddon was threatening the financial system...The largest bankruptcy in American history, that of investment bank Lehman Brothers on Monday, September 15, had roiled global markets, accelerating the stupendous decline in values of every possible investment vehicle- common stocks, corporate bonds, real estate, commodities like oil, copper and gold, private equity and hedge funds alike. (Robert Lenzner, contributor to Forbes).
And that was just the tip of the iceberg. Basically, 2008 was caused by human greed, a quality grounded in self-interest and often without moral compass or social consciousness. Plans for retirement vanished as the TV news and financial reports became a personal and visceral experience. But, unlike the Great Depression, this time the recession didn’t result in a new generation of people who are careful spenders.
Presidential candidates from both parties are addressing the burden of student loans. Sanders wants college to be free and Rubio recalls paying off his own student loans not so long ago. The rising costs of higher education and the need to appeal to younger voters and their families is making this a hot button issue. Why? Because the vast majority of those seeking a college degree obtain that it by paying for it with loans....on credit. Some pay it back over decades while others default.
Schools Can Make a Difference
The place for courses and/or content regarding financial literacy has long been a curricular conversation held in communities, board meetings, and between faculty and administration. In schools where financial literacy is taught, often it is an elective, meaning only a few students get this economic preparation for adult living. But honestly, do you think a half-year course can prepare high schoolers to understand what debt is and how it can affect their lives?
The risk of ignoring the need for financial literacy is great for the students and for the rest of us as well. Given the reality that so many people in their 20’s and 30’s and some in their 40’s are still paying off college debt, we can assume that many of the parents raising the children who attend our schools may be in debt themselves.
If we return to our raison d'être - to prepare children to know how to learn even beyond our reach, and to be ready, when walking across our graduation stages, to go on to college or directly into a career - then we have a responsibility to look at financial literacy as a part of the k-12 curriculum.
As early as the 6th grade, when percentages are taught, the concepts of credit and interest can be spiraled upward into other math classes. The economic consequences can be explored in social studies and English classes. Here is a perfect opportunity for STEM learning and business partners like local banking institutions, or financial planners. They can be invited to work with math and social studies teachers as they build authentic learning opportunities for students to both experience and perform their growing knowledge of the impact interest has on savings and loans. Small business owners and local entrepreneurs can offer insight into business planning and the role of credit in the life cycle of a business. Financial literacy is not best taught as one course, but infused into the already rich curricula from which schools build learning opportunities for their students. In this way, all students will have experience with a growing financial literacy, not just those few with room for an elective in their last years.
Leadership Matters
If you can’t explain it simply, you don’t understand it well enough. - Albert Einstein
As is always the case, if there is to be a change that involves all students, the entire school and district must be involved. Invite parents and community members, as well as students into the process. As the plan for professional development and vertical curriculum planning evolves, there very well may be those in the teaching and leading ranks that can be tapped as resources. Reaching out to board members, parents, community members, and partners in the financial community as resources is also key. Holding seminars for parents and community members, perhaps taught by groups of students as they are learning to be financially literate, can extend both the learning opportunity for students and the support by the community. All this can happen with little or no cost. We can affect the financial lives of our graduates if we teach them well. That certainly will help them become college and career ready won’t it?