On June 16, 2022, Governor Gretchen Whitmer signed HB5190, a bipartisan legislative bill that will update Michigan’s high school curriculum to include a financial literacy course. The legislation would add a half-credit personal finance course as a high school graduation requirement, starting with ninth-graders in 2024. The course requirement could fulfill a half credit of the mathematics, language other than English, or visual, performing, or applied arts requirements, and could also be completed as part of an approved career and technical education program. Michigan has resources available to residents when it comes to financial literacy but this would be the first time that the state introduces a financial literacy course requirement for its high school students.
This bill and its development is welcomed by many officials in the state who believe that this will help prepare young Michiganders to take control of their finances. Lt. Governor Garlin Gilchrist II stated “it will teach young Michiganders important skills like budgeting and saving and help them make good financial decisions that pay dividends down the road.” State Representative Diana Farrington stated “personal finance education will serve as a launchpad for Michigan graduates lifting off into adulthood, so they won’t be caught off guard by the financial decisions that await them.”
Many other states across the country are starting to introduce financial literacy as a requirement for high school students due to financial instability present throughout the United States. A report from the Milken Institute on financial literacy in the United States showed that many individuals across the country, both young and old, do not possess the basic knowledge and skills necessary to make financial decisions which puts them at a disadvantage to achieving financial prosperity and stability. However, it seems financial literacy is only a part of the solution, as the report also discusses that the amount of comprehensive financial literacy and resources a student will receive depends on their demographic and socioeconomic characteristics such as their parents’ education, household income, and household wealth. And this gap in resources is greater in the US than in other developed nations.
A report from K-12 financial education platform EVERFI and Tim Kaiser, an associate professor of economics at the University of Koblenz-Landau, emphasized the importance of having not just financial literacy but access to financial resources. They found that the wealth gap is driven by systemic factors including a lack of access to capital, a lack of financial systems in minority communities, and widespread racism in the financial services industry. Kaiser stated that “If you focus on financial decision-making, you implicitly blame the individual, and that’s a highly dangerous narrative to cater to, financial education is not a silver bullet, and the wealth gap is not due to financial illiteracy.”