High school students required to take financial literacy class

LANSING — Last month, Gov. Gretchen Whitmer signed House Bill No. 5190 into law, requiring high school students in public schools to take a financial literacy class.

The legislation adds a half-credit personal finance course as a high school graduation requirement, starting with ninth graders in 2024. The bill, designed to prepare young Michiganders for the future and take control of their finances, was sponsored by State Rep. Diana Farrington, R-Utica.

“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,” Farrington said in a prepared statement. “The course will teach students how to manage their finances. They’ll be prepared to make smart, everyday budget choices — and equipped to handle the challenges that come their way. Establishing a core class dedicated to financial literacy has been a years-long labor of love for me, and I’m truly excited for the students who will fly to new heights through a fuller, richer education.”

The course requirement could fulfill a half credit of the four-credit mathematics requirement, the two-credit language other than English requirement, or the one-credit visual, performing, or applied arts requirement. The course could also be completed as part of an approved career and technical education program. Students from every background will have expanded instruction in financial literacy.

According to Anita Fox, director of the Michigan Department of Insurance and Financial Services, the bill “will help ensure our state gives students the foundation they need to achieve their personal and professional goals.”

“Financial literacy education is something that any graduating senior should have a basic knowledge of,” said Ruthann Varosi, assistant vice president of marketing at Extra Credit Union in Warren. She said with the new class requirement, “We can prepare kids before they graduate.”

For many years, ECU has worked with local districts to set up financial literacy education programs. When young adults go out into the world, they don’t always know how to budget their money or how to improve their credit scores. These are areas in which ECU works with teachers and students.

“A financial literacy education more than anything is about empowering young people to choose their financial future,” Varosi said. “One of the key things we like to emphasize with kids in schools is budgeting. Students need to look at the kind of life they want to lead and how much they are going to budget for it.”

As an example, “They don’t think about the long-term effect of taking out a $10,000 loan for a car. They don’t recognize how they are going to pay for the car,” Varosi said.

Students also need to learn the importance of paying bills on time and the factors that make up individual credit scores. How to get a loan is another serious topic young people should know. The new class requirement will cover those areas.

One program that has been popular with staff and students is the online Banzai Financial Education program. The program is set up so students can get their own accounts and work through assignments based on real life.

Banzai, headquartered in Provo, Utah, is designed to give students the skills they need to manage a budget once they begin living on their own. It allows them the opportunity to practice managing their money through various skills, including personal financial management, budgeting and borrowing.

Teachers can monitor and grade their progress remotely. Students obtain a certificate once they complete the program and receive $25 toward an ECU account. The program, which includes games, takes two to three hours to complete and is incorporated into the lesson plan.

“It would be a fantastic way to bring that into the classroom and fulfill (the new) requirement,” Varosi said. “It is free to have us come in and counsel you.”