Ohio Study Provides Snapshot Of State Of High School Finance Education

Now that Ohio has made personal finance basics a mandatory requirement to graduate from high school, people are starting to look at the problem of who teaches it and what it consists of (just look at the comment threads in the two related posts below to see the wide spectrum of opinions and personal experience anecdotes). A new Ohio State University study has found that the current level of teaching is all over the place—and the people teaching it have widely varying levels of knowledge about the subject matter.

From the survey, which was distributed to 1,145 Ohio high schools, Loibl found that most personal finance curricula was taught by family and consumer science teachers (38 percent) or business education teachers (33 percent). Social studies teachers (20 percent) also often taught the subject. Teaching it to a lesser degree were math, science, technology, and agricultural science teachers (6 percent total), and other teachers, including English and fine arts (3 percent).

Not surprisingly, different teachers tended to focus on different personal finance topics in the classroom, Loibl found. Family and consumer sciences teachers were more likely to teach credit, budgeting, and financial goal-setting, while business teachers were more likely to focus on tax topics, credit and insurance and social studies teachers were more likely to teach about investments, taxes, and limited-resources topics.

What’s troubling is that a large number of those teaching the subject weren’t able to show mastery of the material—which may indicate a need to provide some appropriate teacher-training before it can be passed down successfully to the next generation:

The survey also quizzed the teachers on their own knowledge of personal finance topics, such as when is the best time to transfer money into a long-term bond fund, and what is the average credit score in the United States. Only two of the respondents answered all nine questions correctly. Only three questions were answered correctly by more than half of the teachers. Teachers from different disciplines had different strengths. For example, business education teachers (who earned the highest scores, overall) were more likely to know that negative financial information can stay on a person’s credit report for seven to 10 years, while social studies teachers were more likely to know the best average returns over the last 20 years have been generated by stocks in comparison with other investment options.

“Study examines how Ohio high schools teach personal finance” [North Texas e-News]

“‘Checkbook Math’ Being Phased Out Of High Schools”
Quicklink: Ohio mandates personal finance education in high school


Edit Your Comment

  1. umbriago says:

    Too bad there aren’t any opportunities in Ohio for the kids to make any money.

  2. merekat says:

    To be effective, this class would need to be taught by a teacher who is currently in foreclosure. Not hard to come by in Ohio these days.

  3. zolielo says:

    From one of the other threads:

    I taught Personal Finance. It was basically about consumer credit, consumer spending, and investing for the short run and the long run. Housing and real estate investing, personal financial planning, and various investment vehicles such as equity, fixed rate of return instruments, annuities, and insurance as well as the fundamentals of tax planning are addressed. The emphasis was on evaluating choices and understanding the consequences of decisions in terms of opportunity costs, trades, and margins. Plus I added in a bit of money and banking, growth models, and the real fundamentals such as check book balancing.

    I would like to clarify that I taught at the undergraduate level. As far as I recall, I cannot instruct at public schools in my home state. I am not quite sure if that is their loss or mine…

  4. rouftop says:

    Um… when is the best time to transfer money into a long-term bond fund?

  5. sibertater says:

    @umbriago: AMEN! I actually live in Indiana, but I ask you…what’s the difference? There are all of these initiatives to bring in business and keep recent graduates from leaving the state, however none of them actually involve tricks that actually work.

    I know that when I finish my degree I’m leaving the state.

  6. zolielo says:

    @rouftop: Time horizon (at least ten year to counter some volatility), yield + credit quality (risk), forecast of potential interest rates (opportunity cost), if you want to diversify between short and intermediate bonds. Tip of the ice berg… Maybe the consumerist can make a thread…

  7. witeowl says:

    “Now that Ohio has made teaching personal finance basics a mandatory requirement to graduate from high school…”

    Somehow I doubt that people have to actually teach a personal finance class before being handed a high school diploma. Are you sure you don’t mean ‘attending’ or ‘completing’?

    (OTOH, if teaching a class is a requirement for students, then no wonder Ohio is having questionable results…)

  8. @witeowl: Yikes, that was a big one (as far as errors). I have removed “teaching” and castigated myself accordingly.

    …although students teaching the subject would help explain the lack of mastery revealed by the survey…

  9. The_Duke says:

    I can’t count how many comments I’ve read on this site along the lines of “a personal finance class should be mandatory in high school”. Well, Ohio is giving it a go. Good for them. Of course there will be bumps along the way, but this is the start of a much needed program…

  10. Adam Hyland says:

    this sort of information disconnect happens with a lot of graduation “filler classes” at this level of education. If you take a class that doesn’t have a dedicated department (or rather, doesn’t fit specifically into one department), has a seemingly shallow knowledge base, and NEEDS to be taught to everyone (in other words, the volume of students is high), then you have a recipe for disaster.

    Just be happy that they aren’t pulling Gym teachers to teach this stuff, like they did for history classes in my school.

    I’m not saying that a teacher needs complete tecnical mastery of a subject prior to teaching it. What I am saying is that a teacher with less than complete mastery will suffer if not given a clear set of goals and instruction beforehand. In this case, you have a relatively deceptive subject–it seems easy (See the comments in “Checkbook Math”), but it is in fact difficult to understand and to convey. As a result, you introduce gaps in knowledge, simplification and errors when you don’t have a clear curriculum guide.

    For those of you who think this stuff is simple. Tell me the difference between a stock and a bond. Tell me why interest on a bond rises when price on the bond falls. Tell me why I get a low interest rate on my checking account (now that I can get one at all). Tell me what the difference is between term and whole life insurance. For the “easier” stuff, tell me what the likely food budget of an 18 year old living by himself is. Herself? Tell me how much money should be kept aside for repairs based on the age of your car and the miles you put on it.

    and so on, and so on.

    this isn’t rocket surgery, but it isn’t easy, either.

    Here’s to hoping that it doesn’t get a short shrift.

  11. cSam says:

    I had to take a class in freshman year of high school called “teenage issues” for half the year, and half of that term was spent on “consumer issues.” So this home ec teacher spent a quarter of the year teaching us how to write checks, thinking about careers (don’t know how that fit in), and telling that credit cards are bad. They spent a week or two explaining to us why we could not be trusted with credit cards/how credit card companies screw you over. Seriously, that was all I came out of the class with. And now I’m in college and have no idea how bonds, stocks, credit reports, or taxes work. Well, that’s not strictly true: I’ve learned quite a bit in the last few months…since I’ve started reading the consumerist regularly. I cannot stress how much more I’ve learned from this site than from that stupid required class in high school that just wasted a few months of my life.

  12. Adam Hyland says:

    @csam: Too many times people are soured on experiences by crappy teachers. I’m sorry that happened to you, but please understand it doesn’t make the CONCEPT of a class wasteful.

  13. zolielo says:

    @Hyland: All to easy to answer your questions but I really must draw a line in the sand.

  14. redx says:

    I think some of that teaching material is somewhat irrelevant. Introduction to Microeconomics is all they need. Who cares about the average credit score? Your goal is to optimize your own. Transferring money into a bond? I suppose assuming all else equal and with interests rates going down, you want to lock in that rate before it falls. But thats only one solution to your personal finances. If you buy a stock ETF, returns should be higher. Overall, its very cookie-cutter solutions but maybe thats what those students need to learn.

  15. redx says:

    Another example of cookie cutter solutions is that diversification is good. But, its only good if you don’t have superior information. I’m not saying teaching personal finance isn’t good, just that there is more to the decision making process in the real world.

  16. anatak says:

    @The_Duke: Spot-on. Its great that they are trying this. I think the real question is not “what do the people know who are teaching it?”, but rather “what are they teaching?”. Its all about curriculum. If they are using the free, ‘fox in the hen-house’, Visa curriculum, then they might as well not be doing it.