California students will be required to complete wallet economics courses — balancing a checkbook, managing credit cards, avoiding scams — before graduating from high school under a bill set to become law, state lawmakers announced Thursday.
“We need to help Californians prepare for their financial future sooner rather than later,” Gov. Gavin Newsom said in a statement. “Saving for the future, investing and spending wisely are lifelong skills that young people need to learn before they start their careers, not after.”
The bill, which would require school districts and charter schools to offer stand-alone, semester-long personal finance courses, has drawn criticism from those concerned about crowded academic schedules. To meet requirements, this course cannot be combined with any other course beginning in the 2027-28 academic year.
Students graduating in 2031 must pass the course.
Agreement among state lawmakers avoids ballot box ruling by voters. Supporters of the new requirements have collected enough signatures to put the proposed requirements, known as the California Personal Finance Initiative, on the November ballot. They will now cease this effort.
The new requirements and the bill that would make it into law “will benefit countless Californians,” said Tim Ranzetta, a wealthy Silicon Valley businessman who funded the signature gathering for the ballot initiative and also supported the legislation. .
Thursday was the legal deadline for Lanzetta to withdraw the ballot initiative, which he said he would do if a proper version of the guarantee became law.
“I want to thank everyone who worked with us on this legislation,” Lanzetta said.
Ranzetta leads a nonprofit organization, Next Generation Personal Finance, that provides free classes and teacher training. He said the materials have been delivered to nearly 100,000 teachers across the country, including more than 6,000 in California.
While there is widespread agreement on the importance of financial literacy, not everyone supports the requirement or the process for achieving it.
Troy Flint, chief information officer for the California School Boards Association, said: “There is a philosophical objection to the way voting governance — billionaires with their wealth — have an impact on the curriculum in our schools. Disproportional impact “We don’t think it’s the best system. “
He said financial literacy could be folded into the existing one-semester economics requirement.
“Financial literacy instruction can be included in the larger existing economics curriculum without further disrupting high school students’ course schedules and reducing their ability to take elective courses or courses that interest them, and this new bill will do just that. at this point.
The final version of the bill attempts to address this problem by allowing students to replace the currently required semester of economics courses with personal finance, according to legislative analysis.
Former Los Angeles School Supt. Austin Beutner also expressed concerns.
“It’s even more important for children to have a foundation in literacy and math before entering high school,” he said. “If they have this, then there is no mystery to personal finance.
The bill was introduced by Sen. Kevin McCarty, D-Sacramento. Not everyone fully agreed from the start. McCarty introduced a similar bill last year that was modified to make financial literacy an optional part of the economics curriculum, which would already be possible. Lanzetta dropped his support for the bill — even a watered-down version failed to pass.
The fate of this round of bills changed with support from the governor and chamber leaders.
“Financial literacy is an important tool that lasts a lifetime,” said Senate President Pro Tempore Mike McGuire (D-North Coast). “There is plenty of data showing the benefits of taking these valuable lessons in high school, from improved credit scores and lower default rates to increasing the likelihood that our children and grandchildren will keep three months of savings for a rainy day and have at least one retirement account. .
“Ensuring our students have the skills and knowledge to thrive is critical to California’s continued success,” said House Speaker Robert Rivas (D-Salinas).
Separately, California lawmakers recently added ethnic studies courses to the list of mandatory courses.
Minimum graduation requirements include three years of English and two years of mathematics, including one year of algebra. There are also two years of science courses, including biological and physical sciences and three years of social studies, as well as two years of physical education, one year of visual or performing arts, world languages, or career technical education.
If a student wishes to apply to a four-year state university, there are additional requirements, and selective colleges carefully evaluate the rigor of a student’s upper-level courses. School districts often have their own additional requirements as well.
Colleen Ancrile, a Los Angeles high school teacher, said her school is incorporating financial literacy into its counseling program, which is similar to previous homeroom courses. “Adding a course to all the other requirements would be a scheduling difficulty. Financial literacy should be embedded from elementary school onwards. Contact an accounting firm to intervene [is] Actually a better idea.
“The idea is great, but it’s difficult to implement,” said Los Angeles parent Beth Owen. “The requirements for graduation are already quite onerous, and students often end up finding themselves missing out on something and having to scramble…Electives are usually classes that are held every year, like band. Having to drop something like that for one semester just doesn’t work. Or Leadership or Yearbook – A valuable year-long commitment.
Irene Luczynski, a parent in the Los Angeles area, was “surprised” how few opportunities her ninth-grade son had in electives: “He didn’t really have the space to branch out and try new things, and electives were just Is that so? “Things to do…maybe it’s a trivial thing, but where’s the fun in school?
However, momentum for financial literacy appears to be building. The number of states guaranteeing personal finance education for high school students has increased from eight to 26 in 2021, according to the Lanzetta organization, which tracks the issue.
In an earlier analysis, Champlain College’s Center for Financial Literacy gave California an “F” on the topic: “Personal finance is not included in graduation requirements, either as a stand-alone course or embedded in another course, and the school also Financial literacy courses are not required.
The researchers gave California some credit because the state’s education department provides “a robust list of financial literacy resources.”
Additionally, the state’s CalMoneySmart program provides annual grants of up to $200,000 to nonprofit organizations “to provide financial education and financial empowerment programs and services to unbanked and underbanked Californians.”
A report from consulting firm Tyton Partners concluded that California students would reap $127,000 in lifetime benefits from taking a semester-long high school personal finance course — though that figure is difficult to prove and ultimately abstract from the real-world experience of young people. .
