“What is a mutual fund?” Sam Rogers asked his financial literacy class.
Tessa Sabin, an 11th grader at Riverton High School, offered a guess: “Isn’t it where you invest in something that’s invested in multiple things? So that if one of them tanks, it doesn’t affect you overall because your investment is spread around.”
Rogers throws a lollipop to her for answering correctly. This kind of question is normal in Utah high schools, where financial literacy is a core requirement to graduate. Five states in the U.S. earn an A grade from Champlain College’s Center for Financial Literacy when it comes to teaching personal finance in high school, but only Utah has gotten an A+.
“I tell my students this is the most important class they’ll ever take,” Rogers said.
The Center for Financial Literacy produces a national report card that assigns grades to each state based on the approach to personal finance education. In order to earn an A, a state must mandate personal finance instruction be a requirement for graduation and the class must be a semester long. Nineteen states earn a B, which mandates personal finance as part of another required course (like a broader economics or civics class). Ten states, including California, and the District of Columbia receive an F, which is where a “state has virtually no requirements for personal finance education in high school.” (The Center for Financial Literacy produces the national report card that comes out every two years.)
States that earn a C, D or F grade may have local school districts that require stronger personal finance education, but the study grades based on state-level policy.
So what makes Utah different?
“Why isn’t it a bigger deal for everyone?” Spencer Cox, Utah’s Lieutenant Governor, asked. “It seems like such a no-brainer that we should be teaching something that is so important and so practical on so many levels to our students.”
All of the A states offer the equivalent of one-half year of a course exclusively dedicated to personal finance, but Utah’s state board of education set standards for educators. All teachers who teach the course must be endorsed to teach personal finance.
“It’s as important as math, reading, English,” said Patricia Jones, a former Utah state senator who sponsored Senate Bill 40 in 2014, which strengthened Utah’s approach to personal finance in high school.
“Much of our education system is designed to prepare us for careers in specific fields, but very few of them really help our kids learn how to live in relation to money,” Jones said when speaking to the state senate in 2014. “Our kids are certainly not getting the information because, oftentimes, their parents don’t have the information.”
“I think the challenge that we had also we didn’t have a real strong curriculum,” said former state representative Rich Cunningham, the bill’s floor sponsor in the state house. “Now, it’s probably one of the strongest curriculums that we have that are actually teaching financial concepts.”
Teachers are required to educate students about broad concepts, like decision-making and goal-setting, but they’re also required to teach more complex things like credit scores, investing, retirement savings and how to navigate student loans.
“It’s not easy, and I’m not going to claim that every day these kids are engaged,” said Rogers. “I try to make the lectures short, but I also have them on laptops just about every day looking up information. We’re playing the stock market game, and they’re learning how the stock market works.”
Rogers also brings in guest speakers, like financial planners, uses multimedia and interactive quiz games. Rogers even has students watch the film “Confessions of a Shopaholic” to talk about Becky Bloomwood’s habits.
What about student loan debt?
Students are also taught the ins and outs of student loans, especially timely because most students taking the course are juniors or seniors and heading to college soon.
“Utahns tend to not want to rely on the federal government, like Pell grants,” said Jones. “There’s actually a push to have us take more advantage of those Pell grants.” (Pell grants are need-based grants given by the federal government to students.)
“I tell them flat out ‘student loans … if you have to borrow money to go to school, that is an investment in yourself, but you have to be very, very careful.” Rogers said. “Student loans will offer you more money every year than what you actually need.”
That lesson seems to be received by students statewide, as Utah has the lowest average student loan debt in the nation. The average Utah student graduates college with $18,873 in student loan debt, compared with $37,172 nationally.
“I’m ending my fourth year now, and I don’t have any loans yet,” said Kaitlin McLean, a fourth-year student at the University of Utah. “I worked really, really hard in my school to get good grades to get good scholarships, and I picked a school that offered me the most in financial aid. And then after that point, when my financial aid started running out, I got jobs so I’ve worked two or three jobs through college.”
Is it really that good?
Some students, like Nick Whitworth, loved the class. Whitworth is studying to become a certified financial planner at Utah Valley University.
“The biggest thing I remember was the rule of 72,” Whitworth said. (The rule of 72 is a simplified way to determine how long it will take an investment to double based on the rate of return.) “I thought ‘When I start making money, I’m going to find a way to leverage this rule that I just learned.”
But some students aren’t fans.
McLean attended high school in Utah, but said her high school finance teacher didn’t really know the concepts she was teaching.
“I think what they were trying to teach us was really important and really valuable,” McLean said. “There definitely was a disconnect between what we were supposed to be learning and what our instructor knew. I think it became clear through the course that she also was not financially literate.”
McLean graduated high school before the Jones-Cunningham law passed, which strengthened already existing legislation that had been part of Utah’s school curriculum since 2003. Before the 2014 legislation, teachers were pulled from many different areas of expertise to teach financial literacy: drivers’ education, geography, language.
“A farmer would be eligible to teach this class because he or she would be good in accounting their crops in the spring and the fall,” said Cunningham.
Cunningham told Yahoo Finance that flaw has been addressed. Teachers are trained and certified by the state to teach financial topics.
“They have semi-annual conferences that bring in teachers from each of the school districts,” Cunningham said. “They had instructors and people from all over the United States that teach financial economic literacy.”
Some students say that hasn’t really helped, like Cici Iongi, a 2017 high school graduate.
“The lectures were just really bad,” Iongi said. “It was just like a PowerPoint, in the dark, for a whole hour-and-a-half. We never had homework; it was just a really easy class that you just got over with.”
But Sam Rogers said the endorsement process he went through to become certified was rigorous.
“You have to have a number of hours, both face to face and online, pretty much testing your knowledge of financial literacy,” Rogers said. “Those teachers are just coming in [who haven’t] taught a lot of financial literacy are actually going to start developing their own curriculum during that endorsement process.”
As financial concepts and norms change, the curriculum will change as well. When designing the legislation, Jones and Cunningham designed it to be revisited every three years to make sure students are being taught the most current information.