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Finance & Innovation

Why more high schools should open banks


Hillside High School in Durham, North Carolina recently opened a real, functioning bank on campus to teach students financial literacy. This partnership between Hillside High and the Woodforest National Bank is making an extra effort to teach students how to open accounts, make deposits and pay bills.

Hillside High School joins the many high schools across the United States who offer this type of hands-on financial education. There is, however, a lot of work to be done in improving students’ knowledge on this subject.

In the United States, only five states require high school students to take courses on financial literacy, which is a surprisingly low number considering the recent rise in higher education costs, and the increasingly high number of young adults who are taking out loans for educational expenses.

23.5% of US states received a ‘F’ in teaching financial literacy, and only 9.8% of states received an A.

Financial Literacy US Map.jpgImage: Center for Financial Literacy at Champlain College

The states that received A’s are Tennessee, Virginia, Missouri, Utah and Alabama, which all require students to take a personal finance course for one semester. Most states do not, which places students at a disadvantage, especially when it comes to choosing student loans.

For students entering college or trade school, not having courses that delve into concepts of loan borrowing and collected interest can have devastating long-term consequences. This even involves students who receive government financial assistance during their academic tenure.

Demographically speaking, young loan borrowers who receive bachelor’s degrees—including at state funded, public institutions--are more likely to be in debt. This is especially true if they fall within the low-income earnings category and/or belong to a minority group.  Surprisingly, 84% of Pell Grant recipients—government money given to students that does not need to be repaid—graduate with debt, compared to 46% of non Pell Grant recipients.

Students who attend for-profit institutions face the highest level of loan-associated financial burdens.

School aside, credit card debt in America has risen to a total of $900 billion USD, with the average household carrying around $7,813 USD in debt. Causes for this have been traced to users not understanding how their outstanding balances hurt their credit scores and the economic insecurity so many US citizens feel. 

Generationally speaking, the millennial generation is the hardest hit by their lack of financial knowledge-81% have long-term debt. This age group is also taking from their retirement accounts and overdrawing from their bank accounts to make ends meet.

Schools can play a role in reversing this

In an effort to reverse these negative, long term effects states like North Carolina are making an extra effort to raise their students’ money knowledge. All schools should follow suite and be like Hillside High and the countless others who make financial literacy a priority.