According to PEW, the U.S. household debt has reached $13.2 trillion in the first quarter of 2018, which is higher than what it was during the 2008 financial crisis. Additionally, student loan debt has reached a record high of $1.5 trillion in the first quarter of 2018.
Does America’s increasing debt have something to do with the fact that only 17 out of the 50 states have personal finance as a prerequisite for high school graduation?
Kentucky is one of the states that’s behind in financial literacy. They have the eighth-highest personal bankruptcy rate in the U.S., with 345 bankruptcy filings per 100,000 residents.
PEW relates that last year, Kentucky’s state Treasurer Allison Ball spoke to high school seniors about credit cards and finance, but saw that the information being relayed to them was met with blank stares. She attributes that to the fact that one week before graduation, the students were unaware of what the term “interest” even meant.
In 2020, Kentucky will require incoming high school freshmen to take a financial literacy course before they graduate. In the course, students will learn how to understand and manage their credit, create a budget, take out a loan for a large purchase, and even how to save for retirement.
It took six years for Kentucky policymakers to finally bring this financial literacy measure into law. Though there are no studies to prove how financial literacy classes affect students as they transition into adulthood, Kentucky state officials are hopeful that by investing in their students, they will bring about a change for the state’s financial status.
Maryland is one of the states whose Board of Education, in 2011, set financial literacy standards for grades 3 through 12. However, whether or not these standards are implemented has been left up to each school district. For more information about the state of financial literacy in Maryland, tune into last week’s Facebook Live to hear from the State of MD Financial Literacy Committee.
What do you think — should financial literacy be a required high school prerequisite around the country? Leave your thoughts in the comments below!
On last week’s edition, we welcomed Rich Gottfried, Second Vice President of the Society and Chair of the Young Professionals Committee, to discuss the all-important topic of Financial Literacy. We then discussed how the Maryland legislature is attempting to offer college financial savings options for Maryland taxpayers. Read on for a closer look at the segments on this week’s recap!
FINANCIAL LITERACY
April is Financial Literacy Month—a very important topic that the MSATP community is actively trying to promote at levels of the education system. We have been collaborating with other agencies, including the Maryland Coalition for Financial Literacy and the Maryland Council on Economic Education, to lay a solid financial foundation for the next generation of competent, confident and financially literate adults. For more information on what financial literacy entails, check out this great resource published by the Maryland Council on Economic Education! (http://www.econed.org/2018/02/1487/)
While financial literacy is a required course offering in some Maryland public schools, it is only a mandatory graduation requirement in Baltimore City Schools and seven other county school systems.
MSATP is working with the Maryland Financial Literacy Coalition to offer our member volunteers as guest speakers that meet with teachers from elementary to high school grade levels and deliver presentations to their classes that focus on financial literacy topics the teacher and member volunteer have selected. Ann Elliot, a long-time member of the Society and a current volunteer with the MSATP Financial Literacy Team, submitted some of her thoughts after a recent visit to Eleanor Roosevelt High School: “In December, I presented at Northwestern High School in Hyattsville…I started with how I’d begun working the accounting field, how I’d begun working for myself, and how long I’d been doing it. I discussed various career opportunities, the pros and cons of accounting and tax work, including hours, sitting at a desk for long hours, multi-tasking, and working within various organizations versus working for yourself.” Ann also offered some suggestions on how the financial literacy initiative might be improved in the future: “One take away would be that I think it might be helpful to have someone available for one on one meetings, questions and discussions with students that are sincerely interested. If during the career day programs, they allowed for some of us to be available to meet, the interested students may have an opportunity to drill down to their interests. In the classroom environment, it didn’t allow for more directed discussions without most of the class being excluded.”
MARYLAND’S NEW COLLEGE SAVING PROGRAMS
Maryland offers two great Sec 529 plans—the Maryland Prepaid College Trust and the Maryland College Investment Plan—that allow parents to save early for their children’s education while enjoying tax savings on their Maryland income tax return.
The State of Maryland and Maryland 529 are now teaming up to start a new initiative called The Save4College State Contribution Program. The plan, managed by T. Rowe Price, gives eligible taxpayers the opportunity to receive a one-time matching amount of $250. These funds can be applied to tuition at any U.S. college, technical or trade school and even international schools. To be eligible for the program, your tax client must meet the following criteria:
Must be a Maryland resident
The previous tax year’s taxable income must not exceed $112,500 as an individual or $175,000 jointly
Must open a Maryland College Investment Plan or have opened an account after December 31, 2016
Submit an application for the Save4College State Contribution Program prior to June 1, 2018 and make a minimum contribution to the investment plan between July 1 and November 1.
Additionally, the MSA Scholarship Foundation offers scholarship opportunities for Maryland accounting students who are Maryland Residents. In 2017, the Foundation awarded 17 scholarships totaling $30,500. The Foundation will begin reviewing applications for the 2018-2019 Academic Year on June 15, 2018. If you know a current accounting student who might benefit, make sure you have them complete the on-line application by June 15, 2018! (www.msascholarships.org)
