personal financial literacy in new hampshirepersonal

Rockefeller Center at Dartmouth College Policy Research ShopA Center for Public Policy and the Social Sciences

Personal Financial Literacy in New HampshirePersonal Financial Literacy in New HampshirePersonal Financial Literacy in New HampshirePersonal Financial Literacy in New Hampshire________________________________________________________________________________________________________________

Assessing the Need & Efficacy of Personal Financial Education inAssessing the Need & Efficacy of Personal Financial Education inNew Hampshire Public SchoolsNew Hampshire Public Schools

Prepared by:

Michael Fields ‘11 Kristen Liu ‘11

Derek Summerville ‘11

The Rockefeller Center at Dartmouth College gPolicy Research Shop


AgendaAgenda

I.I. The State of Personal Finance in NHThe State of Personal Finance in NH•• NH generally exceeds the national indicatorsNH generally exceeds the national indicators

II.II. Personal Finance Programs and CurriculaPersonal Finance Programs and Curricula•• Guaranteed Access to StudentsGuaranteed Access to Students•• Solid State Models for NH to build onSolid State Models for NH to build on•• Solid State Models for NH to build onSolid State Models for NH to build on

III.III. The Data on Personal Financial LiteracyThe Data on Personal Financial Literacy•• NH students exceed the national average but still failNH students exceed the national average but still failNH students exceed the national average, but still failNH students exceed the national average, but still fail•• Efficacy of programs is mixedEfficacy of programs is mixed

IV.IV. Policy Recommendations for NHPolicy Recommendations for NHyy•• Program must be complete, integrated, applied and supportedProgram must be complete, integrated, applied and supported


Identifying the Issue

Financial Capability

?Financial Literacy

?New Hampshire Citizen

?New Hampshire Citizen


The State of Personal Finance in New HampshireThe State of Personal Finance in New Hampshirepp________________________________________________________________________________________________________________


Financial Indicator

United States

New Hampshire NH v. US

Unemployment(March 2009)

8.5% 6.2% - 27%

B k t 0 09% 0 07% 22%Bankruptcy

(2008)0.09% 0.07% - 22%

Home Foreclosure 1.01% 0.7% - 31%(2008)

.0 % 0.7% 3 %

Average Student Debt(2007)

$20,098 $25,211 + 25%( )

Credit Score

(2007)692 715 + 4%

Average Credit Debt(2007)

$17,014 $20,068 + 18%


Personal Finance Programs and CurriculaPersonal Finance Programs and Curriculagg________________________________________________________________________________________________________________


2 Levels of Personal Finance Education Programs2 Levels of Personal Finance Education ProgramsAttaining Financial Literacy and Achieving Financial CapabilityAttaining Financial Literacy and Achieving Financial Capability

1. Student/Public School System

Attaining Financial Literacy and Achieving Financial CapabilityAttaining Financial Literacy and Achieving Financial Capability

Personal Finance Courses (3 States)Personal Finance in Curriculum (17 States)

/No Personal Finance / Elective Credit (35 States) Legislation regarding Personal Finance (31 States) State trends show 4 5 year Development PeriodState trends show 4-5 year Development Period


2 Levels of Personal Finance Education Programs2 Levels of Personal Finance Education ProgramsAttaining Financial Literacy and Achieving Financial CapabilityAttaining Financial Literacy and Achieving Financial Capability

2. Adult/Workforce2. Adult/Workforce

Attaining Financial Literacy and Achieving Financial CapabilityAttaining Financial Literacy and Achieving Financial Capability

National ProgramsNational ProgramsMoney SmartFDIC Money Smart ProgramFDIC Money Smart Program

1 1 million consumers1 1 million consumers1.1 million consumers1.1 million consumers

NeighborWorks AmericaNeighborWorks America13,800 consumers (400 families in NH) 13,800 consumers (400 families in NH) Homebuyer Counseling, Financial WorkshopsHomebuyer Counseling, Financial WorkshopsHomebuyer Counseling, Financial WorkshopsHomebuyer Counseling, Financial Workshops

UNH Cooperative ExtensionUNH Cooperative Extension

State/Community ProgramsState/Community Programs

13,695 consumers (Tax counseling) 13,695 consumers (Tax counseling) MultiMulti--service service -- Includes “Financial Fitness”Includes “Financial Fitness”


Comparison of Government Access at 2 Levels

1 P bli S h l S t /St d t1. Public School System/Student

+ Establish early financial behavior and planning + Guaranteed point of public participation + Final point of intervention for 49% of citizens

Limited immediate application and impact– Limited immediate application and impact2. Workforce/Adult

+ Immediate application and targeted impact – No guarantee of participation regardless of success

Illi d fi i l b h i l d bli h d– Illiteracy and poor financial behavior already established – Lack of organizing authority- new public regulation


US Financial Education TimelineUS Financial Education Timeline

20022002 Office of Financial EducationOffice of Financial Education Established in US Treasury DepartmentEstablished in US Treasury DepartmentUS Treasury authors a White Paper: US Treasury authors a White Paper: Financial Education in CurriculaFinancial Education in Curricula

20032003 h b fi d G l i i l i Ch b fi d G l i i l i C20032003 Utah becomes first state to mandate General Financial Literacy Course Utah becomes first state to mandate General Financial Literacy Course Financial Literacy and Education CommissionFinancial Literacy and Education Commission EstablishedEstablished

20062006 National Strategy for Financial Literacy:National Strategy for Financial Literacy: Taking Ownership of the FutureTaking Ownership of the Future20062006 National Strategy for Financial Literacy: National Strategy for Financial Literacy: Taking Ownership of the FutureTaking Ownership of the FutureImplemented by Financial Literacy and Education CommissionImplemented by Financial Literacy and Education Commission

20072007 Creation ofCreation of www.mymoney.govwww.mymoney.gov under the National Strategyunder the National Strategy20072007 Creation of Creation of www.mymoney.govwww.mymoney.gov under the National Strategyunder the National Strategy

20082008 President’s Advisory Council on Financial LiteracyPresident’s Advisory Council on Financial Literacy EstablishedEstablishedUS Treasury, Citi Bank, Jump$tart sponsor US Treasury, Citi Bank, Jump$tart sponsor Money Math CurriculumMoney Math Curriculumy, , J p$ py, , J p$ p yy

20092009 S.94 passes US Senate S.94 passes US Senate -- April 2009April 2009 designated designated “Financial Literacy Month”“Financial Literacy Month”


Average of 33,100 Visits / MonthAverage of 33,100 Visits / Month


US Personal Financial Literacy Education by StateUS Personal Financial Literacy Education by State


US Personal Financial Literacy Education by StateUS Personal Financial Literacy Education by State

State Utah Missouri Tennessee Colorado Iowa New Mexico Year 2003 2006 2006 2008 2008 2008

Curricular Structure

General Financial Literacy Course

Personal Finance Course

Personal Finance Course

Mathematics 21st Century Learning Skills

Elective cy s c s c s g

Credit towards Graduation

0.5

0.5*

0.5

N/A

N/A

0.5

Graduation Requirement

Yes C/O 2008

Yes C/O 2010

Yes C/O 2012

Yes N/A

Yes C/O 2011

No Requirement C/O 2008 C/O 2010 C/O 2012 N/A C/O 2011

Development 5 years 4 years 5 years 1 year N/A N/A Funding

DOE: WPU (Weighted

Pupil Unit) $2,577

DESE: Prof. Dev. $2 million

Financial Literacy Fund

DOE Financial Literacy Fund

DOE

Teacher Training

Yes Yes Yes N/A N/A N/A

Institutional Support

Financial Literacy Passport

Missouri Model Curriculum

N/A Resource Bank

N/A N/A


New HampshirePersonal Finance Courses are offered electively in most NH High Schools

SS:EC:6 recommends Personal Finance for Economics in Grades 7-8 and 9-12

S i l S di C i l k i l d d f hSocial Studies Curriculum Framework is currently recommended for teachers

Southern New Hampshire University - 8 module curricula for Personal Finance


Wh Hi h S h l Off iWh Hi h S h l Off i

New HampshireWhat High Schools are Offering:What High Schools are Offering:

Personal Finance, Financial Literacy, Consumer Education, Personal Finance, Financial Literacy, Consumer Education, Personal Financial Planning, Consumer Math, Business Math, Personal Financial Planning, Consumer Math, Business Math, Introduction to Business Consumer EconomicsIntroduction to Business Consumer EconomicsIntroduction to Business, Consumer EconomicsIntroduction to Business, Consumer Economics

Curricular Structures:Curricular Structures:60% Electives60% Electives 30% Math 10% Social Studies30% Math 10% Social Studies60% Electives60% Electives 30% Math 10% Social Studies30% Math 10% Social StudiesA Requirement for Graduation at ConVal High School A Requirement for Graduation at ConVal High School Enrolling Enrolling 1010--20% of students20% of students during high school careerduring high school career

School Breakdown:School Breakdown:Surveyed Programs of Studies for all 89 NH High Schools Surveyed Programs of Studies for all 89 NH High Schools 27 27 (30%)(30%) -- No Information / POS Not Available No Information / POS Not Available 60 60 (67%)(67%) -- Personal Finance Course / Infrastructure AvailablePersonal Finance Course / Infrastructure Available

2 2 (2%)(2%) -- No Personal Finance Course / InfrastructureNo Personal Finance Course / Infrastructure


The Data: Personal Financial Literacy in US & NHThe Data: Personal Financial Literacy in US & NHyy________________________________________________________________________________________________________________


New Hampshire and the NationNew Hampshire and the Nation

Jump$tart Financial Literacy SurveyJump$tart Financial Literacy Survey

Dr Lewis MandellDr Lewis MandellDr. Lewis Mandell Dr. Lewis Mandell University of Washington and the Aspen InstituteUniversity of Washington and the Aspen Institute

US AverageUS Average

48.3%48.3%

NH AverageNH Average

52.5%52.5%

N = 6856N = 6856 N = 154N = 154


New Hampshire and the NationNew Hampshire and the NationGender

54.7

52

54

56

49

47.9 47.9

46

48

50Percent CorrectMale

Female

44

46

National NH

N=51 N=101



5552 52

60

Family Income

43 4447

50 5052 52

40

50

20

30 National

NH

0

10

h $ $ $Less than$20,000

$20,000 to$39,000

$40,000 to$79,000

$80,000 ormore



52

53

53

An Entire Course in Money Mgt/ Personal Finance

52

50

51

52

48

47

47

48

49

50

No

Yes

44

45

46

47

N = 131 N = 2344

National NH



5556

An Entire Course in Economics

49

52

54

56

4849

46

46

48

50No

Yes

40

42

44

N = 45 N = 109

40National NH



51

59

60

Stock Game

4851 50

40

50

20

30No

Yes

0

10

20

N = 113 N =41

0National NH



53 54

4953

49

55

4951 51

5960

All Education Options

48 48 49 49 4951 51

40

50

20

30National

NH

0

10

Average Coursein

PartialMoney

EntireEcon

PartialEcon

StockGamein

MoneyMoney Econ Econ Game



52 5154

60

Plans for Education

35

45

52 51

40

50

29

20

30 National

NH

0

10

No More 2yr or Jr College 4yr CollegeNo MoreEducation

2yr or Jr. College 4yr College


Rockefeller Center Survey: The Upper ValleyRockefeller Center Survey: The Upper Valley

High School Class Offered

Median Income Per

Capita

District Expenditure Per Student

Hanover High School

Personal Finance $30,393 $8,721

Lebanon High School

Personal Finance and Planning

$25,133 $7,686

Mascoma Valley Regional High

Introduction to Business Economics

$23,054 $5,829g g

School


Rockefeller Center Survey: The Upper ValleyRockefeller Center Survey: The Upper Valley

High School Class Surveyed Average Score

Hanover High School (n = 49)

Personal Finance 49%

Lebanon High School (n = 56)

World Studies 41%

Mascoma Valley Regional High School

Law Studies, Sociology and American History

39%

(n = 58)


Efficacy of Personal Finance ProgramsEfficacy of Personal Finance Programsy gy g________________________________________________________________________________________________________________


The Theory of Financial Education


Applying Literacy

Financial Literacy

New Hampshire Citizen

Financial Education

New Hampshire Citizen


High School Education WorksHigh School Education Works

Bernheim et al. Landmark studyBernheim et al. Landmark study

‘57 to ‘85: ‘57 to ‘85: 29 29 states mandate consumer education, states mandate consumer education, 1414 mandate mandate coverage of financial decision makingcoverage of financial decision making

2000 responses from those who graduated high school during 2000 responses from those who graduated high school during this periodthis periodpp



High School Financial Planning Program

Half of the attendees showed an increase in knowledge

3 months later 40% started saving and almost a third opened a savings account


High School Education Doesn’t Work High School Education Doesn’t Work

The Jump$tart 2008 national survey found that students with financial education scored worse(47.5%) than the national average (48.3%)

A smaller study of one school praised for itsA smaller study of one school praised for its financial education found no statistical difference in knowledge or behavior between those who

d d dhad, and those who had not, taken the class


High School Education Doesn’t Work High School Education Doesn’t Work Effect of HS Education

53

54

50

51

52

53

National Average

47

48

49Entire Finance/Money Mgt. Course

44

45

46

2000 2002 2004 2006 20082000 2002 2004 2006 2008

Year




Fi i l iFinancial Literacy

New Hampshire CitizenNew Hampshire Citizen



To successfully navigate Personal Finance:

Knowledge of concepts and termsReading comprehensionBasic ArithmeticBasic ArithmeticComprehension of fractions, percentages and probabilitiesP l di i i h l hPersonal predictions on: income, expenses,healthMarket predictions on: interest rates, investment performance, inflation


Teacher Training and Institutional SupportTeacher Training and Institutional Support

Teacher’s KnowledgeTeacher’s Knowledge

M h l i b f ili i h fi i lMost teachers claim to be familiar with financial literacy, but definedefine the topic differently

Wide variations in self described expertise

Some research shows teachers are surprisingly well prepared


Teacher Training and Institutional SupportTeacher Training and Institutional Support

Teacher Needs Currently Teaching FinanceCurrently Teaching Finance Currently Not Teaching FinanceCurrently Not Teaching Finance

Lack of RequirementsLack of Requirements

L k f TiL k f Ti

Lack of TimeLack of Time

L k f F di / M i lL k f F di / M i l Lack of TimeLack of Time

Lack of DemandLack of Demand

Lack of Funding / MaterialsLack of Funding / Materials

Roughly 1/3 of both cite a lack of Professional DevelopmentRoughly 1/3 of both cite a lack of Professional Development


Policy Recommendations for New HampshirePolicy Recommendations for New Hampshirey py p________________________________________________________________________________________________________________


A Plan for New HampshireA Plan for New HampshireSample Personal Financial Education Pilot Program

Level Curricular Requirements Institutional Support Teacher Training Elementary School K-5

K-2 Simulation • Project-Based Learning

3-5 Simulation

Financial Literacy Passport Simulation Partnerships

Yes

3 5 Simulation• Enterprise Village

Financial Literacy Fund

Middle School 6-8

Incorporated into: • Mathematics (6-8) • Social Studies (7-8)

Curricular Modules & Lesson Plans L P t hi

Yes

Lesson Partnerships

High School 9-12

Capstone Personal Finance Course • (0.5 Credit) • Social Studies, Mathematics, or

Elective Credit

Model Curriculums: • Personal Finance • Stock Market Game • Integrated Subjects

Yes

Stock Market Game required in Economics Financial Literacy Incorporated:

• Information/Communications

Resource Bank Financial Literacy Fund

Information/CommunicationsTechnologies Education

• Health Education • Driver Education


A NH Personal Finance Program:A NH Personal Finance Program:

A Plan for New HampshireA Plan for New HampshireA NH Personal Finance Program:A NH Personal Finance Program:

Should be a Should be a completecomplete, integrated, applied and supported program, integrated, applied and supported programPicking and choosing will not lead to sustainable/effective financial educationPicking and choosing will not lead to sustainable/effective financial educationNation and individual states trending towards implementationNation and individual states trending towards implementationNation and individual states trending towards implementationNation and individual states trending towards implementation

If NH decides to wait:If NH decides to wait:Courses are offered, but largely ineffective and Courses are offered, but largely ineffective and limited in participationlimited in participationg yg y p pp pWill likely fall behind national trendsWill likely fall behind national trendsNo immediate financial cost No immediate financial cost

If NH implements:If NH implements:Start SmallStart Small: Pilot Programs with 3: Pilot Programs with 3--4 districts implementing the plan4 districts implementing the planFacilitated effort to gather best practices of current coursesFacilitated effort to gather best practices of current coursesSt t i i l t t d di ti ( i lid )St t i i l t t d di ti ( i lid )Strategic curricular structure and coordination (previous slide)Strategic curricular structure and coordination (previous slide)Involve community and business partners Involve community and business partners -- Financial Literacy FundFinancial Literacy Fund

personal financial literacy in new hampshirepersonal

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