House bill would keep high schoolers’ personal finance curriculum up to date

      Missouri high school students’ education in personal finance would be regularly updated, to keep up with changes in the world of finance, under a bill being considered in the state House.

      The Department of Elementary and Secondary Education (DESE) already requires that high schools teach personal finance.  House Bill 809 would ensure that this continues by putting it in state statute.  It would also add the stipulation that a work group review the mandated curriculum every seven years to make sure it’s keeping with the times.

      The bill is sponsored by Representative Michael O’Donnell (R-St. Louis), who among other things is a fixed income securities trader for an investment firm. 

He said the working group proposed in HB 809 would include people with backgrounds in both education and finance.  They would work, “to make sure that we’re building a curriculum that’s age appropriate – the course would be for [high school-aged students] – and then make sure that we’re covering the important topics in the industry that folks are going to need to know once they’re out in the real world.”

      “We might bring in a banker and say, ‘We’re really seeing a problem in this area,’ or one of the folks on the other side of the aisle brought up giving educational training on student loans.   Most folks come out of high school not realizing really what that student loan model looks like, and in a lot of cases it’s not necessarily good,” said O’Donnell. 

      He said a lot of aspects of personal finance aren’t intuitive, and Missouri needs to make sure students understand what they’ll be getting into.

      “Understanding how to balance your checkbook, understanding how to take out a loan … we look at a mortgage as a nice, sound investment; a nice, stable investment, but most folks don’t realize that when they take out a 30-year mortgage they’re probably paying for that house two and three times in the end.”

      O’Donnell said updating the curriculum periodically is an obvious necessity, as changes in financial industries are coming faster and faster.

      “It’s important that we talk about the things that are current and that are important, and particularly, [that] may cause problems for folks.”

      “So much of banking … ten years ago the number of folks that did the bulk of their banking online was pretty small and I would say probably the majority of folks are now doing 90-plus percent of their banking online,” said O’Donnell.  “The other thing that we probably wouldn’t have talked about ten years ago is floating rate mortgages.  Interest rates have been so low for so long that we’ve been talking about fixed rate mortgages for a long time.  Now we’re in this higher interest rate environment where folks should know that to get that lower interest rate on that adjustable mortgage, it means something and that there are some pitfalls.”

      The legislation would require a half-credit, equal to one semester, of education on this subject matter.  O’Donnell discussed with legislators on the House Committee on Elementary and Secondary Education whether that would be enough.

      “A year is probably too long because then you start getting way too technical and way too complicated for folks, especially at that high school level, but giving them enough exposure to the material in that one semester will get them started on the right foot,” said O’Donnell.

      The committee did discuss incorporating some of this education at a less-complicated level into an earlier grade level, such as eighth grade. 

      The bill’s supporters include the Missouri Bankers Association and the Missouri Credit Union Association.   No one testified in opposition to it.

      HB 809 cleared that committee on a 12-0 vote and awaits action by a second committee.  O’Donnell said the language of this bill will likely be incorporated into at least two other pieces of legislation.