April 20, 2013

Maine bill aims to teach kids basic finances

Lawmakers say children don't understand credit cards or how to check bank statements.

By Susan M. Cover scover@mainetoday.com
State House Bureau

AUGUSTA – A tripartisan group of young lawmakers is behind a new piece of legislation that would require high school students to learn how to manage money and debt.

Rep. Matt Pouliot, R-Augusta, is sponsoring L.D. 843, "An Act to Promote the Financial Literacy of High School Students."

"There are people in our state who understand the game and those who don't," Pouliot said Friday during a public hearing on the bill. "It is incumbent upon us to level the playing field for all by providing this education to all of our students. We simply can't afford to not do this."

Pouliot got support for his bill from Rep. Matthea Daughtry, D-Brunswick, and Rep. Ben Chipman, an independent from Portland, as well as several people associated with schools and the finance industry.

Chipman introduced similar legislation last session, but it was watered down to require the Department of Education to gather information about what already was going on in schools.

"This bill takes it back to a requirement," Chipman said.

Daughtry presented data from a Charles Schwab & Co. survey of teens that showed a dramatic decline in their knowledge of personal finances from 2007 to 2011. Among the findings for 18-year-olds:

32 percent know how credit card interest and fees work.

43 percent know how to balance a checkbook or check the accuracy of a bank statement.

39 percent know how to manage a credit card.

Some of those who testified said they are particularly concerned about the amount of college student loan debt and the number of young adults who are graduating with significant debt before they even land their first job.

"The risks of not promoting financial literacy among our youth are clear," said Craig Larrabee, president of Jobs for Maine's Graduates, which helps at-risk teens. "We've seen those risks play out in previous generations resulting in the recent housing crisis, the low rate of savings, and a lack of retirement planning."

An amendment proposed by Pouliot would make financial literacy part of the social studies curriculum and require it to be integrated into existing course work.

No one testified in opposition to the bill, which also would require the state Board of Education to form a task force to study the issue and report back to lawmakers next year.

Pouliot presented information from the National Conference of State Legislatures that shows 32 states are considering legislation related to financial literacy or financial education. The Legislature's Education and Cultural Affairs Committee will consider the bill in the coming weeks.

 

Susan Cover can be contacted at 621-5643 or at:

scover@mainetoday.com

 

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