After previously passing through the state Senate, the bill passed the state House and is now in need of Governor Roy Cooper’s signature to become law.
Currently, North Carolina’s high school students are required to take a class that combines civics and economics. The Economics & Financial Literacy Act states the curriculum for the new, semester-long required course was created by the Council for Economic Education. Some of the topics to be covered include:
- The true cost of credit
- Choosing and covering a credit card
- Borrowing money for a big purchase, such as an automobile
- Home mortgages
- Credit scoring and credit reports
- Planning and paying for post-secondary education
- Other relevant financial literacy issues
The personal finance class would replace one of several history courses required for high school students. Some people in North Carolina are opposed to the new class, arguing that U.S. history education is more important.
The idea behind the personal finance class is to instill financial literacy in children so they do not become saddled with debt throughout their life. Lt. Gov. Dan Forest recently tweeted his reasons for supporting a course about personal finance, which included some scary statistics about debt in America:
— Lt. Gov. Dan Forest (@LtGovDanForest) June 18, 2019
He notes in the post that the nation is $1.5 trillion dollars in debt, and that student loan debt has become the biggest form of debt. According to his statistics, 40% of Americans can’t deal with an unexpected $400 in unexpected expenses, and half of Americans have more credit card debt than money in savings. Additionally, 21% of Americans have no money saved for retirement.
According to Nerdwallet’s 2018 annual report on household debt, the average American household holds $6,741 in revolving balances, which are carried from month to month. About 49% of American families carry some credit card debt. And Nerdwallet reports that 1 in 11 of people carrying credit card debt think they’ll never get free of it.
Meanwhile, student loans are becoming a bigger problem for many. Student loan forbearance, for example, is adding a lot of debt to individuals’ tallies. While this practice allows the pausing of repayment, interest still accrues. Nerdwallet offers a forbearance calculator so you can estimate how much you’d actually lose by putting payments on hold.
And household debt is increasing; the Center for Microeconomic Data says total household debt rose by $124 billion in the first quarter of 2019, reaching a high of $13.67 trillion overall. This is an increase of 0.9% from 2018’s final quarter. Balances were higher on mortgages, auto loans, and student loans, but credit card balances fell.
North Carolina isn’t the only state mulling a financial literacy course: New Jersey’s governor signed the state’s financial literacy requirement into law in January 2019. Its curriculum is geared toward 6th- through 8th-graders and focuses on budgeting, saving, debt, credit, insurance, investment, and “other issues associated with personal financial responsibility,” the bill says.
According to a 2018 report from the Council For Economic Education, only one-third of states require their students to have taken a class on personal finance before graduation. The report found that 17 states require students to take a course in personal finance, while 22 states require students to take a course in economics.
Do you think financial literacy, including education about credit and debt, should be taught to high school students and middle school students?