Apr 19, 2022

Dr. Carly Urban Guest post: What happens when states guarantee personal finance for ALL high schoolers?

Spoiler Alert: Good things happen! 

We are excited to welcome Dr. Carly Urban to the NGPF Blog to answer this important question. Carly will be joining Christian next Thursday (the 28th) for a panel discussion highlighting the latest research on the State of Financial Education in 2022. You can register here


Dr. Carly Urban's post: 

I’m a PhD Economist who researches the effects of financial education—you can also find me chasing snow in the mountains! I’m taking over the NGPF blog from time-to-time to update you on new research in the field. I’ll tell you about interesting findings without getting wonky.

This post is straightforward and covers the question: What happens when states require personal finance for high school graduation? 

  1. Credit improves: credit scores increase and delinquency rates fall.
  2. Use of alternative financial services falls: less payday borrowing.
  3. Student loan decisions improve: borrowing shifts from high cost (credit card debt, private student loans) to low cost (Stafford loans, grants and scholarships), and long-run student loan repayment rates increase for first-gen and low-income students. 
  4. Subjective financial well-being improves, for some: overall those required to have financial education in high school feel better about their ability to meet day-to-day and month-to-month financial objectives. Those who ended their education with a high school diploma see a drop in financial well-being because they say they will never have the things they want in life because of money. 
  5. Retirement savings remains unchanged: The likelihood of having a retirement savings account or amounts do not change by age 40. 

Should we be worried that financial education doesn’t affect savings? Probably not! Requiring financial education improves credit, debt, and borrowing outcomes. It has less of an impact on savings. This makes sense! Students are about to embark upon a journey investing in themselves—their skills, knowledge, and the discovery of their future career path. Saving more could require more borrowing up front—or lower their incomes later. Also, retirement savings is so connected to employers, it’s probably harder to move through education. 

All of the research to date considers what happens when states require any personal finance before high school graduation (embedded in another class, within a few different classes, or standalone courses). We know that fewer than half of schools in states with embedded personal finance mandates actually have the requirement in place. This means states with a full semester of personal finance required likely have even larger effects. 

Bio: Dr. Carly Urban is Associate Professor of Economics at Montana State University, a Research Fellow at the Institute for Labor Economics (IZA), and a research fellow at the TIAA Institute. She has a full page on her website dedicated to just financial education research, where most of her work has been centered on financial education in schools. When she is not working, she usually spends her time adventuring in the mountains with her husband or her dogs, Cannon and Panda.


Interested in learning more about access to financial education in your state and community. Check out the NGPF Got Finance? School Search Map

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