Financial education in Minnesota schools could help reduce economic disparities

There is no requirement in Minnesota that students take a stand-alone course on personal finance.

During a financial literacy class, teacher Greg Waugh asks for a show of hands of those who have started a savings account. Waugh hopes to help Woodbury, Minnesota, High School students avoid the pitfalls of debt.
Judy Griesedieck for MPR News

MINNEAPOLIS -- Hodan Hassan lives in one of the most diverse areas in Minnesota.

Her Minneapolis neighborhood includes East Africans, Native Americans, Black people, white people and people from other ethnic and racial backgrounds.

Hassan immigrated from Somalia more than two decades ago. She’s a mental health clinician and a self-described social justice advocate who also represents the area in the Minnesota House as a DFL state representative.

Hassan worries that many of her young constituents and other students around Minnesota are not getting enough information in school about how to manage money.

“I finished high school without knowing anything about personal finances,” said Hassan, 40, who said she learned the hard way.


“I went to college and got myself into a lot of debt, and I thought I was the only person that was struggling with managing personal finances,” Hassan said. “Then I talked to some of my friends who are either immigrants or from communities of color, and I realized that many of us were struggling with this because money is not something that families with lower socio-economics talk about.”

There is no requirement in Minnesota that students take a stand-alone course on personal finance. Hassan is pushing legislation that would require all students to take such a class before graduating.

In Minnesota, communities of color consistently lag the majority white population in income, employment, home ownership and other measures of wealth. There are likely many reasons for that, but Hassan and others believe that educating students about financial literacy may help begin to change it.

Even though there's no mandate, many Minnesota schools offer some personal finance education. But unlike English, science, math, and social studies there are no standards as to what should be taught.

Some schools, including Woodbury High School, offer a course as an elective credit.

Greg Waugh enthusiastically teaches the class, which he said is one of the most popular electives at Woodbury High School.

“When you have an emergency fund in place, all of the other stresses in your life tend to be more minimal,” Waugh explained to his students. “Everything is just less because you've got that money back there as a security blanket to you — knowing if anything goes wrong, you've got something to fall back on.”

Waugh said his passion for personal finance education is rooted in his own mistakes. Before becoming a teacher Waugh was a high-income salesperson spending more than he earned. He ended up divorced, laid off and broke.


Rep. Hodan Hassan, DFL-Minneapolis, wants a personal finance course to be a graduation requirement for Minnesota high school students.
Mark Zdechlik / MPR News

“I think if students understand at a young age, if they're just smart with the income that they have and the money that they have, whether they go to college or whether they don't, they can be fine,” Waugh said. “They can build wealth and they can be happy and do the things they want to in life.”

Classes like Waugh’s are becoming more popular across the country, according to Billy Hensley, the president of the National Endowment for Financial Education.

“People are really waking up to the fact that our financial landscape is much more complicated,” Hensley said. “You know, we went from a society where a majority of workers had access to pensions and so forth. And now we all have to be the CFO of our retirement as well as the CFO of our financial lives.”

Breaking the cycle

Businesses have CFOs — Chief Financial Officers — but most of us are on our own when it comes to managing the cost of health care, using credit cards, doing taxes, buying a house or a car, planning for retirement and even having enough money on hand to buy groceries.

John Pelletier, who runs the Center for Financial Literacy at Champlain College in Vermont, tracks and grades the way personal finance skills are taught in high schools throughout the country.

He applauds Minnesota’s move toward joining more than 10 other states which have imposed personal finance high school graduation mandates. That’s nearly twice as many as five years ago, Pelletier noted.

Like Hassan, Pelletier talks about personal finance education in the context of equity and the cycle of poverty.

“And if you want to break that cycle, I think you've got to get this knowledge to those who I believe need it the most,” Pelletier said. “Who are those who are the poorest? And as the data shows, minorities tend, on average, to be in that poor category. And so they're struggling.”


Supporters of mandating personal finance education for high school students often point to research done by Montana State University economics professor Carly Urban.

Greg Waugh, left, teaches financial literacy to Woodbury, Minnesota, High School students in the hope of instructing them how to avoid the pitfalls of debt.
Judy Griesedieck for MPR News

By comparing states, Urban has demonstrated when teenagers are taught personal financial management skills, they change their money management behavior for the better.

“So their credit scores are higher after they're required to take financial literacy courses in high school,” Urban said. “Also, they're less likely to be delinquent on any of their outstanding debt, which again, is a good thing. And then a really interesting finding, in my mind, is that for students who go on to post-secondary education, they're borrowing smarter.”

‘It’s an issue of this era’

Republicans and Democrats are increasingly in rare agreement when it comes to imposing financial literacy requirements for high school graduates.

Last month, Florida Gov. Ron DeSantis signed a bill mandating personal finance education as a graduation requirement after it passed both houses of the Florida Legislature unanimously.

“It’s an embarrassment if our high schools and even our middle schools don't realize that personal finance is very important to the students,” said Minnesota Rep. Sondra Erickson, R-Princeton. Even though Erickson supports personal finance education, she was one of two Republicans to vote against the bill in the House Education Committee.

“It's best if we leave it up to the locals instead of mandating it,” Erickson said. “I really honor that local control and think that our districts can make that decision. If we leave this up to districts, they might do a better job.”

Hodan Hassan countered that without a statewide mandate, many young people are going to continue missing out on critical personal finance skills.


“It's a social justice issue. It's an equity issue,” Hassan said. “It’s an issue of this era.”

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