CFPB Director Richard Cordray stressed on Tuesday the importance of consumer financial education in American schools.
“Financial education should be as fundamental as the education we are all required to receive in American history and government,” Cordray said in remarks prepared for the Investing in Our Future Conference held in Washington, D.C. on Tuesday. “We must be deliberate about pursuing financial education in our schools. Failing to do so is to condemn boys and girls to make the same mistakes others have made before them by enrolling them in the ‘school of hard knocks,’ which we all know is no school at all. It is the antithesis of education for each generation to have to learn the same lessons the hard way. It is utterly unacceptable.”
Cordray advocated for the implementation of early financial education curricula in American schools, adding that personal finance should also be taught to high school students.
“When we do not teach children about personal finance…we are failing them in a very shameful and costly way,” Cordray said. “So, our first recommendation is that financial education should start early and be continuous. We also need to have integrated curricula in our schools—where the benefits of compound interest are understood in math class, where economic costs and risks are taught in social studies class and where an essay in English class explains how we use money or how we protect our money or how we can take control of our financial lives to achieve our goals. In addition to integrated curricula, I believe it is extremely important to require young people to receive further instruction in personal finance education during high school, when they are becoming conscious of the reality that they are getting close to going out on their own to make their own way in the world.”
Cordray said that while a majority of K-12 teachers believe personal finance should be taught in schools, only one in five teachers feels adequately prepared to teach the subject.
“We want to ensure that teachers have the support they need,” Cordray said. “We want them to have access to training and incentives to take part, such as continuing education credits or need-based travel stipends. Not only do we want to equip teachers with the training they need to teach financial skills, but we are also recommending the integration of financial education concepts into standardized tests. Doing so would increase incentives for educators to teach these topics and present an opportunity to measure and track the performance of students on financial education content.”