Students 'hungry' to learn financial skills
MIAMI -- Each day after school, 17-year-old Phyllis Quach goes to a warehouse filled with silk flowers, stuffed animals and other gift items her parents sell through their South Florida wholesale business.
The recession hit the family hard and they can no longer afford the building. Quach helps pack the goods for a move to a cheaper location. On weekends, her mother often goes door to door, hoping to find new retail customers.
"I never want to go through what they go through," Quach said, tears gathering in her eyes.
So Quach is taking a personal finance course at her Miami high school -- getting early lessons on managing credit, balancing a budget and buying a first home. Experts say the recession's length and severity means it could affect the students' lifelong financial behavior, as the Great Depression affected their grandparents' frugal generation.
The number of states requiring public high schools to offer a personal finance course rose from nine to 15 between 2007 and 2009, according to the Council for Economic Education. Thirteen states require a personal finance course for graduation, up from seven in 2007. Many schools elsewhere offer or require such courses. The Treasury Department recently announced a national award program to encourage financial education in schools.
"The students are hungry for this information," said John Parfrey, director of the National Endowment for Financial Education's high school program. "They see what is going on in their own home."
For many years, schools relegated personal finance to a home economics course, if they taught it at all. Students picked up the spending patterns of their parents -- good and bad.
"It was not seen as a necessary life skill, and it was sort of seen as the kind of thing that should probably be learned in the home," said Jim Hedemark, executive director of Rhode Island Jump Start Coalition, which promotes financial literacy among youth and other vulnerable groups.
Meanwhile, personal finance became more complicated, credit card debt increased dramatically and families began opting into risky adjustable-rate mortgages they didn't understand to buy homes they couldn't afford, all elements of the recent meltdown of the economy.
"A good place to start so this doesn't happen again is the high school level. That's where younger people start to become more financially independent," said Connecticut state Sen. Scott Frantz, who is pushing for a law to require public high school students to learn about the basics of home mortgage lending, excessive speculation and the dangers of accumulating debt.
In Amy Broekhuizen's personal finance class at East Kentwood High School in central Michigan, teenagers want to know how to start a 401(k) retirement account -- something she was never asked three or four years ago. Broekhuizen teaches 180 students today, double what she taught five years ago.