52% Of Students Cannot Pass Financial Minimum Educational Standards

Financial Literacy mandates are failing our students, says the NFEC in a new report they just released. While financial education is a much-discussed topic and financial literacy is critical for children, financial education is not held to the same standards as other subjects, even in states where schools are required to teach them.

This report follows a report that levels of financial literacy among American youth and young adults remain low.

The NFEC has been gathering financial literacy data across all 50 states since 2014, with more than 150,000 people participating in the quizzes to date. The most recent findings from January 2023 indicate that 52% of the 45,916 participants aged 15 to 18 were unable to pass the NFEC’s National Financial Literacy Test with a score of 70 or better.

At the time, we discussed how the test may be an inaccurate way of teaching financial literacy and how the correct answers fail to teach students in a way that can help them in the future.

New Report

A groundbreaking report released today by the National Financial Educators Council (NFEC) reveals a glaring deficiency in financial literacy instruction across every state in the US.

The report highlights that not a single state meets the basic educational standards required by other subjects, painting a worrisome picture of the current state of financial education in our nation.

Financial Literacy as a Core Subject

While K-12 education standards have undergone continuous reform and updates since the 1980s, the guidelines in place today fail to include financial literacy as a core subject. Instead, the focus remains on traditional subjects such as English/Language Arts, Social Studies, and STEM, which only benefit a small percentage of high school graduates as they navigate the real world. Conversely, financial literacy education has the potential to benefit 100% of high school graduates throughout their lives. Yet, comprehensive standards for financial education mandates are yet to be implemented in the US.

The NFEC asserts that financial education should be held to the same rigorous standards as other subjects, aligning personal finance instruction with educational best practices. Students need to acquire skills in earning income and managing money to achieve lifelong success. These skills should be imparted through rigorous teaching methods that foster higher-level thinking skills and ensure long-term retention. Qualified and competent teachers, high-quality curriculum resources, and appropriate scaffolding are essential components. Furthermore, assessments should evaluate not only content knowledge but also students’ ability to apply that knowledge to real-world decisions.

Mandates Fail

Vince Shorb, CEO of the NFEC, emphasizes, “All state financial literacy mandates fail our children. Applying at least basic educational standards to financial literacy programming is a matter of common sense. Financial education is a topic that every individual is required to utilize every day of their lives. It significantly impacts people’s success and security. Educators, assessments, and materials should meet standards that are at least equal to those required for other subjects taught in schools.”

The NFEC’s Policy & Framework Standards for High School Financial Literacy Education report presents a comprehensive framework for policymakers that establishes rigorous educational standards for financial literacy. These standards encompass instructor qualifications, outcome measures, resources and educational methodologies, age-appropriate scaffolding, alignment with cognitive development stages, parental involvement, and ongoing education.

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Hi! I am a millennial mom with a passion for personal finance. I have always been “into” personal finance but got inspired to start my blog after a period of extended unemployment. That experience really changed the way I viewed my relationship with money and the importance of accessible personal finance education.