Oregon's stronger K-12 financial literacy standards still aren't ideal ...

Fifteen years ago, Oregon got rid of the requirement that high schoolers pass a half-year personal finance class to graduate.

Back then, times were good. We wanted kids better schooled in math and science to hack it in a world economy.

"People were saying this isn't something the schools should be spending their time on," remembers Andrea Morgan, who taught the class at Silverton High School. "This is something parents should be teaching their children."

Not enough did.

At least, not enough to keep up with shady tactics of loan sharks, for-profit schools' jump onto the student-loan gravy train and banks' widespread reliance on overdraft fees.

Just to name a few things.

Oregon will try to shift that dynamic back in the other direction somewhat, starting this week. That's when beefed-up standards for financial literacy take effect in public schools.

They require, among other things, kindergartners to be introduced to forms of money and high schoolers to learn about insurance, consumer protections and the inherent cost of credit.

That said, the Oregon Board of Education won't require students to pass tests on economics or household budgeting to earn a diploma.

"It's not ideal," said Melody Thompson, executive director of Financial Beginnings, a Portland nonprofit that sends volunteers into classrooms to teach financial literacy. "It's a step in the right direction."

In this country, financial literacy remains largely a voluntary thing.

Fourteen states require their schools to offer a course on personal finance, according to the Council for Economic Education. None requires it for graduation.

Only 16 states tested students on economics last year, three fewer than in 2009, the council found.

Oregon and Washington don't require personal finance courses. They don't mandate economics tests, either.

Outside the home, that leaves financial literacy up to true-believer educators, volunteers and a host of disparate nonprofits. Many of their literacy initiatives are underwritten by banks, which the cynics among us note peddled the very products and practices that require more education and frequent changes to classroom curricula.

Our kids could use better. According to a study awaiting publication in the Journal of Economics and Finance Education, U.S. high school students averaged 52 percent on tests of personal financial concepts. That's "an F letter grade for most high school grading scales," said the authors, from the University of Nebraska's economics department.

It's worth noting that those tests were given to 6,650 students in personal finance and similar courses who were competing against each another for prizes and recognition in the National Finance Challenge. Meaning the results most likely represent a "best-case scenario for financial literacy in U.S. high schools," co-author Carlos Asarta said.

Oregon's revised standards should help. Previously, they were limited, vague and buried amid government and economics. They focused on the risks and benefits of entrepreneurship, investment opportunities, economic decisions and credit.

The new standards are more specific and aligned with our daily challenges. They require discussion of "good debt" and "bad debt," identity theft, student loans and online banking. They want students to know how to fill out state and federal tax forms, the difference between CDs and other long-term investments and how to prepare a budget that allows for "living within one's means."

They start early, too. Our 5-, 6- and 7-year-olds will learn about money, savings and sources of income.

But from third through eighth grade, personal finance pretty much disappears from the standards to make room for core topics.

"There's less and less time dedicated to social sciences as they teach reading and mathematics," said Morgan, who now oversees social sciences curriculum for the Oregon Department of Education.

Too bad all that focus on scientific inquiry, rational numbers and an author's point of view hasn't produced a preponderance of thinking consumers.

"It's pretty clear when I start class that students have a very limited understanding about the basics," said Craig Vattiat, who's taught elective personal finance courses at Oregon City High School for six years. "Some students say they want to avoid the 'mistakes my parents made.'"

I surveyed a handful of Oregon high schools last week to see where they were carrying out these improved standards in the classroom.

Two knew how they would handle the matter. West Linn High School will fold it into its Advanced Placement and regular economics classes, veteran teacher Tonya Dailey said.

North Lake High School, 70 miles southeast of Bend, will break its senior social studies class into three parts -- government, economics and personal finance, first-year teacher Andrew Shawcroft said.

A couple of other districts I talked with were still trying to figure it out. Not surprisingly, the subjects students must master to graduate -- reading, writing and (soon) math -- take precedence.

"If it's a state test, and it's a graduation requirement, obviously you put more focus on those things," said Ryan Rudolf, social studies teacher to 70-student Ione High School in Morrow County.

The new standards leave a bit to be desired, experienced teachers say.

"The one thing that stuck out to me as not being in standards is making purchasing decisions," said Vattiat, of Oregon City High. "There are so many resources available, and if you don't take advantage of those resources you can make a really poor choice that's going to cost you a bunch of money. You work really hard for your income. To see that wasted on products of poor quality or that don't meet your needs, it can be very frustrating."

The state Education Department does offer a social sciences assessment test. But it's optional. Last year, only 4,200 were administered in high schools, the department said.

Real-life decisions after 18 aren't optional. Given that, we all need to step up to help.

At North Lake, where roughly three-quarters of its 70 students are eligible for free or reduced-cost lunches, Shawcroft has pushed the personal finance segment off until later in the year to give him time to line up more speakers.

"I'd really like to get a loan officer in here," Shawcroft said. "It'd be great to get a college financial aid adviser. The only problem is we're pretty rural. Maybe setting up something with Skype?"

Last year, Financial Beginnings reached nearly 12,500 students with lessons on budgeting, banking, insurance and investing, Thompson said. It would've reached more if it had more trained volunteers.

"The only thing that kept us last year from not growing more is that we didn't have enough volunteers to fill the classes," said Thompson, who sat on a committee that helped develop the new standards. "Last year we didn't even really market the program much because we just weren't filling what we had."

That's one way you can help. If you have a command of financial concepts, consider talking to a class. If you don't, ask questions about how money will be addressed in your kids' classroom.

I'll do my part by exploring the best ways to talk to your kids about money, post-1997.

-- Brent Hunsberger welcomes questions about his column or blog. Reach him at 503-221-8359.?

Source: http://www.oregonlive.com/finance/index.ssf/2012/09/oregons_stonger_k-12_financial.html

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