Apr 14, 2023

NGPF Podcast: Dr. Carly Urban Talking Access to Financial Education Report

Dr. Carly Urban joins us on the podcast to speak about the momentum behind the financial education movement through a discussion of the 2023 State of Financial Education Report. Learn more about the data collection process as well as her findings through this week’s episode.


Timestamps and Transcript: 

Tim Ranzetta: Hey, it's me Tim Ranzetta, co-founder of Next Gen Personal Finance. Thank you for tuning in to this NGPF podcast. Today on the show, you're gonna hear from my colleague Christian. He's joined by the Professor of Economics at Montana State University, dr. Carly Urban. Dr. Urban is a leader in financial education research whose prolific work focuses broadly on how public policies can influence individual behavior. Since 2019, we have partnered with Dr. Urban to conduct her annual census of high school financial education. This report examines individual course catalogs from public high schools to measure access to financial education on a school by school level. She shares her key findings from the research she completed recently for the 2022-2023 school year. Enjoy.

[00:00:57] The Data Collection Process

Christian Sherill: Alright, so welcome Carly Urban. 

Dr. Carly Urban: So I'm gonna call this a census. It's not a perfect census of high schools because we are gonna be looking at online course catalogs and not every high school will have an online course catalog. So take that with a grain of salt. I'm gonna show you everything for the current academic year, and then I'm also gonna go back in time a little bit and to see what the evolution of financial education looks like in schools. 

So what do the data actually look like? If you know me, I'm a total data nerd and this kind of stuff gets me really excited. We've had a team basically hand collecting data from every high school's online course catalog. So we start with data from the US Department of Education that tells you exactly what every high school in America, the name, where it's located, all that kind of stuff. It's just a list basically. And we look up each of those high schools individually, and we look for every personal finance course. So that could be a standalone course, that could be personal finance content in another class. 

We code up the descriptions and a bunch of information. Is it a standalone course? Is it within another course? Is it an elective? Is it a required a class? Sometimes we can see that just in the online course catalog. Sometimes we have to do some more sleuthing to see what's in the graduation requirements.

It's a bear to collect. It takes a lot of months and a lot of people and a lot of checking and, yeah. It's not an easy thing. And now we have the data from 2019 to 2020 all the way through 2022 to 2023. We have over 19,000 courses that are coded up this year, and there's over 10,700 high schools in the sample. So we have a lot of high schools. We have a lot of data. And we have about 7,500 schools that are in the sample every single year. So one of the weird things that happens with data like this is that sometimes course catalogs get locked. And over this sample period, I don't know if you guys remember, but this thing called covid happened and a bunch of schools shut down and it got really complicated.

So a lot of rural schools that didn't have online materials now moved everything online. So they actually had a better developed website and we have a lot more data from rural schools now than we did before. So that's kind of like the geeky, what's going on behind the hood. 

[00:03:16] 2022-2023 Findings

Dr. Carly Urban: Now I'm gonna tell you a lot about what we're actually finding. So our overall stats, and this is just to show you that there's a really big number. Over 2.6 million students are in high schools where personal finance is guaranteed. So it's required as a standalone course, and that's about one in four students, or 24%. And that's gone up a lot over time. A really big number one in four students, again, are guaranteed access to financial education.

So I feel like that's, It's a big thing and I feel like Christian is not, has this big smile on, but maybe not big enough from his fried brain. Yeah, so big numbers, lots of people have access. So that's kind of the, the first good takeaway. Again, given that 10,000 foot view, what kind of different access is out there?

That one in four number is first. So, 24% of students are in schools with a standalone course requirement. Another 17% of students are in schools where personal finance content is embedded into another required class. So that could be an economics class, it could be American government, it could be a bunch of different things, but personal finance is in there somewhere.

And every student will have access to some amount of personal finance content. And then about 38% of students have a standalone elective. What NGPF calls a silver, if you guys are used to that. And then any personal finance content is 14%. So that means it's an elective and it's not the sole focus of a class. 

I think it's also kind of exciting that only 6% of students are in schools with nothing. Absolutely no access whatsoever. So that's, that's not a very big number, and that's probably a good thing. Right? So there's only 6% of school students with nothing. So where, where is this going on? Let's look at the 2022 to 2023 data first and you'll see that there are about eight states, exactly, eight states, that are dark, dark red in this map or the darkest color if you are color deficient. That means that over 99% of students have access, guaranteed access, right? So those are the guarantee states. Not surprisingly, it's 99% because I'm convinced that some of the schools in these states have not updated their course catalogs. They just continue to say that they're using one that looks like it's old. That's one of the, the caveats with, with data collection in this observational way versus a survey. So then there are another few states about three that have between 50 and 75% of students with access are a little bit over that. Some of these are ones that are transitioning. So you'll see n Nebraska there, Arkansas is also a higher gold standard state, if you call it that.

[00:06:06] States with Embedded Requirements

Dr. Carly Urban: Now let's see, access to any requirements, and you'll see that there's a lot more of this going on, a lot more of states having some type of embedded requirement.

But even so, there's a lot of variation and a lot of states where you might expect personal finance to be required within certain something else. You can pick out your, your favorite state there. They're not doing it at the rates we would expect them to. So when we were looking at these guarantee states before those eight states, Pretty much every single school was doing was, you know, requiring that standalone personal finance class.

In terms of these embedded requirements, it seems a lot harder to actually audit, make sure it's happening you know, get it through to schools and. Almost, we should see a lot more states, close to a hundred percent, right? If we know how many states, over 25 now have embedded requirements or standalone requirements, and we're definitely not seeing that and you'll see a lot of variation here. So take this map back to your state if you think that you, you should be higher in this, in this term. You guys know your, your states probably by now, but the eight fully implemented states, and this is directly from NGPF's website, are Alabama, Iowa, Mississippi, Missouri, North Carolina, Tennessee, Utah, and Virginia.

And then the darker states on the right hand side are those that are in progress of implementation. And the, the three darker ones are the ones that had a little. Been implementing for a little bit longer, we should see start to come up. So Nebraska, for example, we saw on the map as being, you know, having more schools with the gold standard, Rhode Island, you can never really see on a map. So we'll look at that a little bit more closely later. 

[00:07:48] Changes Over Time

Dr. Carly Urban: So let's look at some of the changes over time. So we've seen a lot of expansion in these guarantees. So more standalone requirements and more students with access to those. It's been steadily increasing since this the first year that we started collecting the data.

And we did see a lot of increases in having any type of requirement either standalone or embedded up until last year. And now it's actually. Pulled back a little bit. So we actually have seen a slight decline there. And this is kind of holding the school's constant, so we're not changing the composition of schools and saying like, Hey, we have different schools now than we did a year ago. This is keeping everything the same. And it, it's, it's kind of interesting, I thought, and part of this standalone requirement increase is coming from those, you know, those new gold standard states. 

So if we take out those states with guarantees, we still see this increase in standalone requirements and the same kind of trend for any requirements over time. So again, it's not just the state policy. So let's look at these differences. So what I did here is I looked within each state and I said, what were you doing in 2019 to 2020? And what did you do from 2022 to '23? Those two academic years took the difference. So the ones that had growth are in the dark green and the ones that had declines are in red. 

[00:09:14] State Policies 

Dr. Carly Urban: All right, so let's get into the state policies even a little bit further. Let's see what implementation looks like. A standalone personal finance class that's required so much less. Not surprising. We do see that the number of, the fraction of students in a, a school with an embedded requirement is higher, but that's because there are fewer standalone courses. And there's a lot of students in schools with these silver standards, the personal finance standalone elective. Almost half of students have access to that. So, It's kind of interesting and an easy way to transition a state from going from no policy to a full semester requirement. Maybe isn't as lofty of a lift as we may have thought earlier. And again, only 8% of school students have access to nothing. So that's also a good number. Okay, so now if we just look at those with embedded requirements, you'll see this is not actually that different, and this always surprises me. Only if you add up those first two categories, only 39% of student. In these states where personal finance is required to be embedded in another class, actually have it, that's way less than 50%. It's a big number, it's a big gap, I guess you could say. 

[00:10:34] Gaps in non-guarantee States

Dr. Carly Urban: The biggest gap we're finding is that places with over median levels of non-white students. So schools with more, underrepresented minorities are much less likely, 13 percentage points less likely to have any guarantee. And there are 14 percentage points less likely to have a requirement at all. So there's just less access in schools with more minorities. We see the opposite, and maybe these are somewhat related, but this is accounting for both of them at the same time for rural schools. 

Now remember in guaranteed states everybody has it, so we're not gonna focus on that. But in states with embedded requirements, it's actually, not as bad. The gaps are not as stark as they are in states with no policies. So some of that racial disparity goes away. They're no more or less likely to have a requirement at all, and they're only, non-white areas with more non-white students are three and a half percentage points less likely to have a guarantee, which is not as big as 14 percentage points. So it does close the gap a little bit. But we do see that in states with the embedded requirements, the schools with higher poverty, poverty rates are less likely to have access. So it's not nearly as big as that initial', racial divide that we're seeing in the states with no policies but we are seeing some gaps in, in poverty as well. Okay. And then I would be remiss if I did not tell you what happens after states require personal finance in high school. The short story is that credit and debt behaviors improve in both the short and the long run.


[00:12:14] Choosing to Data Collect

Christian Sherill: This has been absolutely fascinating. Like a look under the hood beyond what a state's policy is to try to figure out what schools are actually in those states by looking at course catalogs. And that's actually the focus of my first question. So, can you tell us, in, you know, excruciating detail, why go with this painstaking approach to look at course catalogs, like how does that make your research and your team's research differ from perhaps other, you know, surveys of policy and that kind of thing?

Dr. Carly Urban: Yeah, I think there's a couple reasons. Okay. So first I think when you have an observational approach, a researcher can really understand how you're doing it, what you're doing with it. So I could have a different approach where, you know, I'm, I'm going to each state one at a time and I'm making a State Department of Education contact. And then they're outreaching to every school in their state. But that's gonna be different in every state, and it's gonna be really hard to compare. I'm trying to build a data set that every researcher will understand and be able to use. So generally when you're thinking research, you want things to be replicable and you want things to be, you know, you can validate it. So every researcher will know exactly what our method was and how we did it. And then if there is some type of bias where something is wrong, it should be random. It shouldn't be something where like, oh, we fixed it because these people reached out to me and said that I did this one school wrong. Well, if I did one school wrong here, nobody's probably gonna tell me if the, if the school didn't actually have anything, they're not gonna go the opposite direction.

So it's almost gonna like, bias me towards finding something and it might be different there than somewhere else, and then that's problematic. So you really just don't want anything to be engineered. You want it to all be out there replicable. You want everyone to understand what's happening, right? Data is not. Perfect. But it's, it's done in a clean, if it's done in a clean way where it's understandable and replicable, then that's pretty much the best you can do. I would say the other big advantage, is that or not advantage, the challenge with personal finance is that it lives in all different places.

Like everyone knows what Algebra one looks like or pre-calculus. And what you could do is go to your State Department of Education, ask them for administrative data, get that data, and then look for every student that took. Pre-calculus, right? Because it looks the same everywhere and it's very clearly cataloged. Good luck doing that per personal finance. And we have tried in different states to look for those courses and,= spend time in administrative data, even in Montana, which is a pretty small state. If you don't know, there's not that many schools and it. So long to read through all the courses and try to figure out what people were taking and what that name meant and what was in it.

So we felt like we've really needed the course descriptions in the catalogs to see if personal finance even exists in places and where is it and you know, how do we make it more standardized so that we can find it, or does that even make sense? So that was a long answer, but kind of the why.

Well, that makes a lot of sense. And the applicability for other researchers to be able to use this data to answer other insightful questions about financial education and education in general, is one element of your work that I really admire. Because not only is the fantastic teacher audience and education policy audience able to get use from your work, but other researchers can go get used from your work too. 

Christian Sherill: Can you speak to why course catalogs, can be a more reliable, sort of view into what's happening in schools than just taking the State Department of Education's word for it or something like that?

Dr. Carly Urban: Well, I always, I always think of data as, you know. One, there's different ways to look at. A problem, right? So the State Department of Education might have their data, that's a survey of schools and may have one piece of information.

And actually I've spent a lot of time with states, and I'm happy to do this if you're on, and you have this type of data, kind of seeing if they match. It might be that their course catalogs are out of date, and that might be the sole explanation and that's totally fine. And maybe they've updated it since then and. My data don't have the most relevant data point, but it could also be that somebody's blowing smoke, right? If there is some type of auditing, you always have to be a little bit careful.

Or it could be the person filling out the survey really didn't know the answer and said like, yeah, I think we have this. Think about the last time you were sent a survey and how much time you put into that survey. Sometimes I spend more time on them than others, depending on what my employer wants me to do.

But they're not always a hundred percent. So I think having something to corroborate helps. And I think we've seen it re these data at least, really help the course catalog data really help with that are moving towards implementing a policy or even just passing a policy and saying like, well, what are we already doing? I bet we're already doing. Is usually the answer. And schools usually say like, yeah, we're doing this, but it's, it might be like one day talking about interest rates, and that's not the same thing as a guarantee. 

[00:17:50] Outcomes of Personal Finance Courses

Christian Sherill: Awesome. Another question here, Carly, you mentioned the impact of personal finance courses on credit behaviors. Are there any impacts on investing behaviors and long-term investing behavior?

Dr. Carly Urban: I haven't seen any. I think that's a harder thing to measure. There's definitely no change in just like the intense, the extensive margin. So whether or not you, you know, use the stock market at all or invest at all or have a 401k, or have an employer sponsored retirement account or any other type of investment account, there's really no change there.

But so much of that is tied to your employment anyway, and. There's no evidence that financial education is affecting, whether or not you like, earn more so your earnings in general. So, maybe not crazy. People are kind of fixed in what they want to be doing with their lives, and they're, they're becoming much more savvy on other dimensions.

So, you know, they're not getting into the same trouble that they would have. It's kind of like inoculating them versus curing something. So yeah, I would say there's no evidence yet, but that could be just because the amounts are not, it's a harder thing to measure. 

I'm having a blast. I hope you're having a blast. Carly and I know teachers here in the mix are having a blast as well, but sad. It's time for us to start wrapping up. 

[00:19:20] Conclusion

Tim Ranzetta: A few final housekeeping items before we go. We'll put links to the resources that Dr. Urban mentioned. We'll put that in the show notes, which you can find at www.ngf.org/podcast. Better yet, subscribe iTunes, SoundCloud, Stitcher, or wherever you get your podcast. Leave us a review. Let us know how much you enjoy our podcast, which move us up in the ranking so our guests get even more listens. Wanna thank Ren Makino. He produces our podcast every week, as well as the show notes and the write up. Thank you very much, Ren. So on behalf of Christian, Dr. Carly Urban and myself, I want to thank you again for tuning in to this NGPF podcast.

Have a wonderful week.

About the Authors

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

Ren Makino

Ren started interning at NGPF in 2014, and worked part-time through high school and college. With his knowledge growing alongside NGPF, he joined the team to work full-time after graduating from college in 2020. He is also the producer of the NGPF podcast. During his free time, he likes to try out coffees from different roasters across the world.

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