Teaching Virginia’s Children Some Cents

IMGCAP(1)]A lot of the lessons learned from the past year’s credit crisis are pretty basic. Don’t spend more than you earn. Don’t invest in risky opportunities. Don’t inflate your balance sheet.

Maybe those responsible need to go back to high school.

Starting in the fall of 2010, Virginia’s high schools will require for graduation a one-credit course in economics and personal finance. It’s a bold move by the Virginia Board of Education to ensure the future fiscal responsibility of the Commonwealth’s students, and maybe, just maybe, it’s what we need to get our children on a more prudent path.

Because the current stats don’t look good.

In a 2008 national financial literacy survey of high school seniors by the Jump$tart Coalition for Personal Financial Literacy, a nonprofit providing finance resources and education, Virginia’s kids got a failing grade by answering, on average, only 48 percent of questions correctly.

The data shows, however, that students want to do better.

More than half of teens are eager to learn more about money management, but only 14 percent have taken a class on the topic, according to findings from a Capital One 2007 survey.

While 35 percent of those teenagers indicated they’d like to learn from their parents, we might not be the best role models. A mere 5 percent of adults learned money management skills in elementary or high school, a 2007 Visa survey discovered, but 91 percent said they support requiring that financial education be taught in every high school in the country.

Bravo to Virginia for jumping on the bandwagon! The Commonwealth joins just three other forward-thinking states (Missouri, Tennessee and Utah) with a stand-alone course requirement for financial education.

Mandating a financial literacy graduation requirement has been a long time coming. The Virginia Jump$tart Coalition for Personal Financial Literacy, a nonprofit of which the Virginia Society of Certified Public Accountants is the founding member, has had its eye on this requirement since its inception in 2005.

It’s not easy to change graduation requirements, and proponents of financial literacy education faced tough questions. Should the Virginia Standards of Learning be revised, and/or should the Virginia Standards of Accreditation be changed? Should the Virginia General Assembly pass legislation mandating the requirement?

Ultimately, financial literacy education was proposed through all these means.

Interest was brewing in 2005 when then Virginia Gov. Mark Warner signed a bill requiring Virginia public middle and high schools, as well as higher education public institutions, to provide instruction in economics education and financial literacy.

While the legislation fell short of a graduation requirement, it was a positive first step in financial literacy education.

The Virginia Department of Education showed its support by starting the Commonwealth Scholars Initiative in 2007 — a high school diploma launched in 11 school districts to bridge the gap between standard and advanced diplomas. Commonwealth Scholar students could take a personal finance course as one of the required electives for the diploma program.

Then, in February 2007, Gov. Tim Kaine continued the trend by signing a bill requiring all Virginia public colleges and universities to promote economic and financial literacy principles in an existing general education course, the freshman orientation process or another appropriate outlet.

The message was clear: Virginia’s leaders saw the benefits of educating students — from high school through college — on wise money management principles.

Finally, a grassroots movement in individual Virginia school districts tipped the scale toward a statewide requirement. In the past few years, Salem City took the lead as the first school district to require a half-credit personal finance course for graduation, and others followed suit to offer stand-alone courses. The VBOE became interested in approving similar programs that would be applicable to all school divisions.

On February 19, 2009, the VBOE unanimously approved a one-credit course in economics and personal finance as a requirement for high school graduation. The long-awaited requirement comes in the wake of grassroots advocacy efforts over the past four years by the VSCPA and its members, the Virginia Jump$tart Coalition and other interested parties to mandate financial literacy education in the Commonwealth’s high schools.

Prior to the vote, the VSCPA submitted an official comment and encouraged its CPA members to send feedback to the VBOE to strongly support the graduation requirement.

During the public comment period, the VBOE received 475 comments — with 329 of those comments related specifically to a required course in economics and personal finance. The Virginia business community spoke, and the VBOE listened.

At its February meeting, the VBOE indicated that the comments (primarily from members of VSCPA and Virginia Jump$tart Coalition) were a key factor in its decision to incorporate the required course in the Standards of Accreditation. It was a great example of how a united effort can make a difference by supporting an issue that has a profoundly positive public impact.

On November 17, the final step in the requirement becoming reality came with the VBOE approving revised Standards of Learning to include objectives for the one-credit course in economics and personal finance for high school graduation for all four diplomas (standard, standard technical, advanced studies and advanced technical). Ninth graders starting high school next fall will be the first class who must obtain the credit for graduation.

News of the final requirement was cause for celebration for Virginia Jump$tart and its member organizations, as well as Virginia’s CPAs. Since 2004, CPAs have promoted wise money management and fiscal responsibility for Virginia’s citizens through the Financial Fitness initiative (www.financialfitness.org).

Now the real work begins. Teachers must receive the most up-to-date training in personal finance so they have the tools they need to teach. Parents must support their efforts at home. Students must dedicate themselves to becoming financially savvy.

One thing is certain. The new requirement is a victory for Virginia’s youth. Our students can rest assured they’ll leave high school with the tools to secure a sound financial future — and avoid another financial crisis.

Tina D. Lambert, CAE, is vice president of member and public relations of the Virginia Society of CPAs, an 8,700-member professional association dedicated to enhancing the success of CPAs. She served as president of the Virginia Jump$tart Coalition Board of Directors from 2005–2008. Contact her at tlambert@vscpa.com  or (804) 612-9416.