High Schoolers Flunking Financial Literacy Reports LSU AgCenter Family Economist

Jeanette A. Tucker  |  4/19/2005 10:28:29 PM

News Release Distributed May 2004

A nationwide survey reveals that Louisiana high schoolers continue to decline in their aptitude and ability to manage credit cards, insurance, retirement funds and savings accounts. LSU AgCenter family economics professor Dr. Jeanette Tucker reports on the results.

Tucker is involved with reversing the financial illiteracy trend by teaching secondary teachers how to educate students about financial responsibility through the Jump$tart Coalition for Personal Financial Literacy offered by the LSU AgCenter.

Survey results are part of Jump$tart’s nationwide survey measuring high school seniors’ level of knowledge of personal finance basics, comparing them to the results from similar surveys conducted in 1997, 2000 and 2002 by the coalition. These studies were conducted under the direction of Lewis Mandell, professor of finance and managerial economics at the University of Buffalo School of Management.

On average, Louisianans answered 46 percent of the questions correctly. "This is still a failing grade, based upon the typical grade used by schools, where a grade of 59 percent and lower is an F," Tucker notes, adding, "This falls short of the national average, which is 52.3 percent, up from 50.9 percent in 2000 and 50.2 percent in 2002."

"This score clearly emphasizes the urgent need to bring economic education and financial management skills to every Louisiana student," said Ken Uffman, president and CEO emeritus of the Credit Bureau of Baton Rouge and leader of the Louisiana Jump$tart Coalition.

Uffman added, "Recent policy changes that will require financial education in high school in Free Enterprise classes illustrate Louisiana's commitment to begin developing the vital knowledge and skills in our young people. It is critical that present and future generations are empowered with the essentials to achieve and preserve financial security."

Mandell said, "While we still have a long way to go, I am hopeful that the downward trend in financial literacy among Louisiana’s high school seniors will be reversed as more schools offer courses on money management and more parents reinforce these life lessons at home."

Legislation passed during the 2003 Louisiana legislative session mandates that beginning in the 2004-2005 school year, Free Enterprise, a required course for high school graduation in Louisiana, shall include instruction in personal finance. This instruction shall include but shall not be limited to income, money management, spending and credit and savings and investing.

The national questionnaire revealed a positive impact on students attending required money management courses in high school. Of those students who took a full semester of money management courses, the students attending required classes did better (54.1 percent) than those where it was required only for some students (50.6 percent) and those where money management classes were electives (52.7 percent).

To strengthen the capacity of Free Enterprise teachers to deliver this information to students, The LSU AgCenter faculty will offer workshops addressing these curriculum components June and July. The six-hour sessions will be offered in Alexandria, Baton Rouge, Crowley, Houma, Hammond, Jonesville, Lake Charles, Mandeville, Metairie, Natchitoches, Oak Grove, Shreveport, West Monroe and Winnsboro. Participants will receive free copies of the High School Financial Planning Program and unbiased, research-based curricula that provide innovative, hands-on learning materials. There is no charge to attend, but participants must register online at http://www.lsuagcenter.com/fcs/HSFPP_training/reg.asp. Contact Donna Shaffers or Jeanette Tucker at 225-578-6701 or jtucker@agcenter.lsu.edu for additional information.

"Interest in teaching financial literacy in public schools surged this year with 24 state bills, resolutions and proclamations introduced in the first quarter of 2004 alone," said Dara Duguay, executive director of the national Jump$tart Coalition.

"Congress also established a new Financial Literacy and Education Commission to coordinate federal agencies’ financial education efforts, so we hope this added emphasis on the need for Americans to become financially literate will translate into increased interest in our nation’s schools," Duguay added.

Tucker reports other findings from the national 2004 survey:

• Parental involvement plays a great role in the financial education and literacy of young people, since the vast majority of students say they are learning most of their money management skills at home. Of the students surveyed, 58.3 percent said skills are learned at home, verses 19.5 percent of students who said they learn such skills at school and 17.6 percent from experience.

• Having parents with a higher education helped. Of the students whose parents have college degrees, 55.4 percent answered the questions correctly, versus 44.6 percent of the students whose parents did not finish high school.

• Students who are planning to continue their education did better than those who aren’t. The test results show that 55. percent of self-described, college-bound seniors answered the questions correctly, versus 41.9 percent of the students who plan no further education.

• Survey questions were divided into four categories: income, money management, saving and spending. High school seniors did a far better job of correctly answering questions about income (62.9 percent) and spending (55.4 percent) than they did about money management (45.4 percent) and saving (41. percent).

• Nearly 78 percent of the students have a savings and/or checking account with a bank. The 22.1 percent of the students without any bank account scored lower (47.4 percent) than those who have a savings account (53.3 percent), a checking account (50.2 percent) and both savings and checking accounts (55.5 percent).

• There was virtually no difference in performance by gender – with 52.4 percent of male students answering the questions correctly versus 52.2 percent of female students with correct answers.

• The average score for white students was 55.5 percent, compared with 48.3 percent for Asian Americans, 48.3 percent for Hispanics, 44 percent for blacks and 46.7 percent for Native Americans. Students from the Northeast scored higher (56.5 percent) than students from the West (52.2 percent), the Midwest (52.4 percent) and the South (49.9 percent).

The Jump$tart survey, conducted this past December, January and February, consisted of a written 45-minute examination administered to 4,074 12th graders in 215 schools across the United States. The survey’s underwriter was Merrill Lynch.

For information on related family and consumer topics, visit the FCS Web site at http://www.lsuagcenter.com/Inst/
Extension/Departments/fcs/. For local information and educational programs, contact an extension agent in your parish LSU AgCenter office.

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On the Internet: LSU AgCenter: http://www.lsuagcenter.com/Inst/
Extension/Departments/fcs/
Source: Jeanette Tucker (225) 578-1425, or Jtucker@agcenter.lsu.edu.

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