Raising the Grade on Financial Education in Oklahoma April 25, 2016 - - PowerPoint PPT Presentation

Raising the Grade on Financial Education in Oklahoma

April 25, 2016 John Pelletier Director

Oklahoma

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Bison Not Dairy Cows!

Population: 3.9 million Dairy Cows: 82,000

Vermont

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Maria Von Trapp Lived Here Population: 630,000 Dairy Cows: 135,000

Vermont

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6 Exploration Wells 1956-1984

Cameo Roles in 4 Batman Movies

See the Bern

Dairy Cows = Cheddar Cheese + Ice Cream!

Oklahoma

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Persuasive Evidence that Climate Change is a Hoax Real Movie Stars: Brad Pitt, Chuck Norris and James Garner

Oklahomans and Vermonters Agree on the Need to Increase the Personal Finance Knowledge of our Children!

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Topics

• Personal Finance Education In Oklahoma

High Schools

• Personal Finance Education In High

Schools Across the Nation

• Teacher Training is Critical
• Keys to Success
• Why Financial Literacy is Relevant for our

Youth

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VT Standards Today

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K -12 Sta nd a rd s: Persona l Dev elop m ent Sta nd a rd s Personal Econom ics: less than 1 Inch Career Choices: 1.5 inches Sustainability: 3.25 inches

Personal Financial Literacy Passport

• Earning an income
• Understanding state and federal taxes
• Banking and financial services
• Balancing a checkbook
• Savings and investing
• Planning for retirement
• Understanding loans and borrowing

money, including predatory lending and payday loans

• Understanding interest, credit card debt,

and online commerce

• Identity fraud and theft
• Rights and responsibilities of renting or

buying a home

• Understanding insurance
• Understanding the financial impact and

consequences of gambling

• Bankruptcy
• Charitable giving

7th to 12th Grade—Will They Remember What They Were Taught 6 Years Ago?

Does Not Need to be Taught in a Class that is a High School

The National Grade Curve

GRADE A: What Do These States Do?

Grade B: What Do These States Do?

2009 National Study: Teachers’ Background and Capacity to Teach Personal Finance*

K-12 Teachers are as financially sophisticated as everyone else

63.8 % of teachers feel unqualified to use their states financial literacy education guidelines or standards (80% of states have adopted some type of guideline or standard) 8 9% of teachers agree or strongly agree that students should take a financial literacy course or pass a test for high school graduation Only 29.7% percent of teachers are teaching financial literacy education in any way—in existing classes or special classed on finance topics Only 37% of K-12 teachers had taken a college course with personal finance Only 11.6% of K-12 teachers had taken a workshop on teaching personal finance Less than 20 % of teachers reported feeling very competent to teach any of the six personal finance topics covered. *Authored by Wendy Way and Karen Holden as a conference paper

for the Association for Financial Counseling and Planning Education Champlain College 21

PREPPED FOR SUCCESS

A Study of Teacher Training, Financial Literacy & Classroom Outcomes

R E S E A R C H R E P O R T | D E C E M B E R 1 5 , 2 0 1 5

Participants

Teacher Training

Classroom Outcomes

Classroom Outcomes

Student Behavior

Generational Comparison

Website Launch: TeachFinLit.org

Why is Financial Literacy Relevant to Young People?

• Huge decision at young age—whether to

continue education or enter workforce

• How to finance the cost of additional

education

Human Brain Develops into mid-20s Unfair to expect adult levels of decision-making before student’s brains are finished being built

Where are the Jobs and What Do They Pay?

41

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How to Get a Million Bucks!

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Bachelor’s degree holders can expect to have median lifetime earnings that is at least $1 million more than someone that just has a high school degree

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Majors Matter

Why Students Choose Major

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Percenta ge of Seniors W ho Sa id the Follow ing Fa ctors Substa ntia lly Influenced Their Choice of Aca d em ic Ma jor:  Academ ic interest or passion for topic 8 9%  Fit for m y talents and strengths 8 9%  Career m obility or advancem ent 59%  Ability to find a job 55%  Potential salary or earnings 52%

Source: 2012 National Survey of Student Engagement

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HOW MUCH DID I INVEST? WHAT’S MY RETURN?

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Making Less/ More Student Loans

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College Debt Levels

National Average of College Debt for a Graduating Senior (2014)

$28 ,950

69% gra d ua ted from p ublic a nd p riv a te nonp rofit colleges w ith stud ent loa n d ebt 17% of d ebt w a s com p rised of p riv a te loa ns tha t ha v e few er consum er p rotections a nd rep a y m ent op tions tha n fed era l loa ns

Oklahoma Average of College Debt for a Graduating Senior (2014):

$23,430

The 43rd Highest Debt Average out of the 50 States Portion with Debt: 55%

Source: The Project on Student Debt Study—Student Debt and the Class of 2014 58

The Impact of Student Loans

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Economic Conditions Impact on Millennials

0% 10% 20% 30% 40% 50% 60% Took a job just to pay bills Gone back to school Unpaid work to build skills Moved back in with parents Postponed having a baby Postponed getting married

Millennial reaction to econom y:

18 -34 year olds responding to survey asking how they have responded to econom y

Source: PEW Research Center

10 20 30 40 50 60 20-24 25-29 30-34 35-39 2003 2013

National Averages of Younger Adults living with Parents

Source: Joint Center For Housing Studies of Harvard University

57% Student Debt

45% Credit Card Debt

42% Car Loan 23% Down Payment Savings 13% Childcare Costs 12% Health Care

What is preventing saving for a home purchase for all First-Time Homebuyers ?

Source: National Association of Realtors, “2014 Profile of Home Buyers and Sellers” – All First-Time Homebuyer respondents, not only Millennials.

Generational Comparison from PEW Research

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% More Difficult Than Parents Easier Than Parents How Millennials view their plight against their parent’s generation:

Why is Financial Literacy Relevant to Young People?

• Shrinking demographics--less workers

supporting each retiree

• Increased longevity—retirement is lasting

longer

• Increased personal responsibility and

likely reduction in govt. benefits like Medicare and Social Security

Retirement—Your on Your Own

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Why is Financial Literacy Relevant to Young People?

• Changing Labor Markets and Reduced Job

Security: Uber and the gig economy; consultant not employee

• Increasingly complex financial markets

and products

• Access to financial products at young age