The Treasury and Education Departments are teaming up to promote financial literacy in schools.

Treasury Secretary Tim Geithner and Education Secretary Arne Duncan outlined their plans in a meeting Tuesday with students, educators and community leaders. They plan to kick off the initiative with the National Financial Capability Challenge, a national award program that aims to encourage financial education in schools across the country and recognize high-performing teachers, students and schools.

A national financial capability survey by the Financial Industry Regulatory Authority’s Investor Education Foundation shows that young adults display much lower financial literacy than older generations, but the administration hopes to promote greater financial literacy across generations to make citizens more economically savvy and better able to protect themselves from predatory financial practices.

“The searing lessons of this crisis are already affecting the financial behavior of an entire generation, as Americans start to save more and borrow less,” said Geithner. “We’re moving forward with financial reform and strong protection for consumers, but we must also do a better job making sure our students graduate from high school with a better understanding of basic economics, basic finance, and the benefits and risks associated with debt.”

The Treasury and Education Departments will be working together to prepare young people to take responsibility for their financial futures by learning more about personal finance.  The first step in that effort, the National Financial Capability Challenge, encourages responsible financial choices that will benefit children now and into adulthood. The administration aims to build resources to support the program’s implementation and expand its reach, with a focus on underserved communities, which, according to the FINRA survey, suffer the most from a lack of access to financial education and resources.

Beginning Tuesday, teachers, schools, school districts, home-school parents, and youth groups can register online to participate. Starting in early 2010, a teacher tool kit developed by outside experts will be provided to all registered teachers to help them integrate financial topics into their curricula. The Challenge exam will be offered from March 15-April 2, 2010. All U.S. high-school-aged students can take part, and students from every participating school will have an opportunity to win awards.

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