Congressman Andre Carson

Representing the 7th District of INDIANA
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Congressman Carson Introduces Bill to Strengthen National Financial Literacy

Mar 8, 2013
Press Release

Congressman Carson Introduces Bill to Strengthen National Financial Literacy

 WASHINGTON, D.C. – Congressman André Carson (IN-7) has introduced H.R. 891, the Young Americans Financial Literacy Act - a bill that seeks to promote the development of effective financial literacy curricula and educational models for students ages 8-24. 

According to the National Foundation for Credit Counseling, more than half of American adults rate themselves as either “fair” or “poor” in terms of financial literacy.  Consequently, problems with personal finance and money management are passed on to children by parents who believe students are learning financial literacy in schools.  In reality, only 30% of teachers are incorporating these lifelong skills into their curriculum. 

As both credit card and student loan debt continue to skyrocket, the need to evaluate personal finances and improve financial literacy has become more apparent.  Under the Young Americans Financial Literacy Act, the new Consumer Financial Protection Bureau would provide grants to partnerships of universities, non-profits, school systems, and financial institutions in order to develop and implement improved financial literacy education programs. 

“We are facing a serious deficit of financial literacy in this country,” said Congressman Carson.  “We need to take smart steps to ensure Americans are empowered with the skills necessary to secure their own economic stability – and that starts with education programs that recognize the importance of responsible personal finance.”

Reaching more young Americans is critical, especially as they begin earning their first paychecks through part-time jobs, considering college loans or buying their first car or apartment.

Congressman Carson went on to say, “We must do a better job of teaching money management skills to young people, from middle school to graduate school. If we can strengthen financial literacy education, and instill these important skills in our kids, we have an opportunity to spur our economic growth and ensure that more Americans have a shot at achieving their financial goals.”

Among Americans:

 

  • Only 39% of Americans keep and track a monthly budget.

  • 32% of Americans do not save any money towards retirement.

  • 34% of Americans carry a credit debt from month to month and 15% of Americans roll over $2,500 or more.

  • 81% of college students underestimate how long it will take to pay off a credit card balance.

 

Among American college students:

 

  • 22% are more than $40,000 in debt when they graduate with a four-year degree.

  • Student loans account for more than $1 trillion dollars in debt.

  • 16% of students live paycheck to paycheck.

  • 12% are too nervous to check their account balances.
     

Among American youth:

 

  • 87% report that their parents are their primary resource for information about personal finance issues

  • 22% report that they talk to their parents about money management “frequently.”

  • 38% say that they are unsure or unprepared to manage their own banking and personal finances.

  • 44% say that they have either not discussed with their parents how student loans work, or they have had a brief conversation with little detail.
     

The US can do more to prepare our citizens for financial literacy:
 

  • According to the Organization for Economic Cooperation and Development, the United States ranked 9th out of 18 countries for financial literacy – just ahead of Russia.

  • Only 17 states require some form of financial education in high school be taken prior to graduation.

  • Students from states where a financial education course was required were more likely to save for the future, more responsible with credit, and more likely to take reasonable financial risks.

 

The Young Americans Financial Literacy Act:
 

  • Establishes a grant program to develop and implement financial literacy programs for young people ages eight to twenty-four;

  • Incentivizes the development of partnerships between institutions or higher education, local educational agencies, non-profit organizations, and financial institutions to develop programs aimed at young Americans in different phases of their life; 

  • Ensures the development of evidence-based instructional material that is geared towards targeted groups and addresses unique life situations, including bankruptcy, foreclosure, student loans, credit card misuse; and

  • Conducts ongoing assessment and accountability of the program over the short- and long-term to ensure that grant money achieves the greatest impact.