Corporation for Enterprise Development Leveraging Schools to Help Students Reach Financial Success

April 2017

Young people must be ready to take on major financial responsibilities, even before they hit adulthood. Financial choices around credit cards, college loans and bank accounts come fast, and young people’s financial behaviors show that many face financial challenges as they enter adulthood. For example, 38% of adults between the ages of 18 and 34 have been late on their student loan payments.3 Fifty-two percent of these adults have engaged in expensive credit card behaviors, and 26% have overdrawn from their checking account.4 Indicating a possible lack of access to mainstream financial products, 38% of young people used at least one non-bank borrowing method in the past five years—including payday loans, pawn shops and auto-title loans.5 These financial behaviors can lead to young people decimating their credit score, creating mountains of debt and starting their independent financial lives buried in a financial hole.

Leveraging Schools to Help Students Reach Financial Success

Starting Early: Building Financial Capability in Children and Youth

This is the final brief of a five-part series that highlights the need to integrate financial capability services into social service programs. The goal of financial capability integration is to improve overall outcomes that lead to financial well-being for low- and moderate-income households. This fifth brief examines ways to help students build financial security through their schools. First, we illustrate how financial capability develops in children and discuss why the school system is an excellent vehicle for that development. We move on to highlight promising practices used in the elementary school, middle school and high school settings and discuss barriers to financial capability integration. Finally, we explore ways that the federal government can encourage the integration of financial capability services into schools.

The first brief in this series describes the overall need for integrating financial capability into social services. The second and third briefs examine how to incorporate those services into workforce development and affordable housing programs.1 The fourth brief concentrates on ways to integrate financial capability services into community health centers.2

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INCREASING FINANCIAL WELL-BEING THROUGH INTEGRATION

Joanna Ain, Senior Policy Manager jain@cfed.org | 202.595.2619

David Newville, Director of Federal Policydnewville@cfed.org | 202.207.0147

FINANCIAL BEHAVIORS IN YOUNG ADULTS

38% were late on student loan payments

52% engaged in expensive credit card behaviors

26% have overdrawn from their checking account

38% used at least one non-bank borrowing method in the

past five years

Source: Financial Capability in the United States, 2016.

IA

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INCREASING FINANCIAL WELL-BEING THROUGH INTEGRATION

These building blocks develop over the course of childhood, and they build upon and reinforce each other over time. From elementary school onwards, young people can begin to set expectations for life goals, start to save and initiate good financial habits. By making good use of these critical early years, young people can develop good financial attitudes, habits, skills and knowledge that they can use throughout their lives. While more research is needed in this area to determine which services work best to build the necessary financial skills and habits at different ages and in different settings, this brief discusses promising strategies that educational institutions (i.e., elementary, middle and high schools) can implement to help young people achieve greater financial well-being in the long run.

Corporation for Enterprise Development

CFPB’s Three Building Blocks for Youth Financial Capability Development

1. Executive function refers to the set of cognitive processes used to plan, focus attention, remember information and juggle multiple tasks successfully. Executive function begins to develop in early childhood, primarily between the ages of three and five.

2. Financial habits and norms are the values, standards, routine practices and rules of thumb used to routinely navigate day-to-day financial life that children begin to acquire during middle childhood. This stage typically begins around the age of six.

3. Financial knowledge and decision-making skills requires familiarity with financial facts and concepts and the ability to do financial research to make conscious and intentional financial choices that come into focus during adolescence and young adulthood, starting approximately at age 13.

Reaching Young People through Schools

One of the best ways to meet students where they are is by helping them build financial capability in school. When children are young, parents can impact how their children, particularly young children, understand and approach finances.7 But many parents are not able to model positive financial behaviors for their children, either because they lack confidence in their own financial decisions or have a negative relationship with money. For these families, schools are often the first opportunity to introduce children to positive behaviors. For all families, schools can enhance positive home learnings and offer ways to test-drive financial products, whether real or simulated. The scope and scale of schools can reach millions of young people and provide meaningful experiential financial learning opportunities. Today, much of this work can be found throughout the country in the form of state financial education requirements for elementary school through high school curricula. In fact, as of 2016, 17 states required high school students to take a personal finance course, while 20 states required their high school students to take an economics course.8

Just as all young people will need to know how to read, write and subtract when they grow older, at some point they’ll also need to know how to manage money. But financial education is not enough. Additional financial capability programs must be included in classrooms to not only strengthen students’ financial knowledge but also to build

Improved financial capability can help equip young people with the knowledge, skills and access to products they must have to navigate through these financial obstacles. While young adults also need the ability to earn a living wage, access to affordable financial services and strong consumer protections, the support of financial capability services can help young people use their early years to prepare for their financial lives as adults. Research from the Consumer Financial Protection Bureau (CFPB) shows that financial concepts and good financial habits should be introduced early and often throughout a young person’s development. CFPB identifies three developmental building blocks for youth financial capability: executive function, financial habits and norms, and financial knowledge and decision-making skills.6

Source: Building Blocks to Help Youth Achieve Financial Capability, 2016.

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INCREASING FINANCIAL WELL-BEING THROUGH INTEGRATION

Corporation for Enterprise Development Leveraging Schools to Help Students Reach Financial SuccessCorporation for Enterprise Development

Elementary and Middle School: Preparing for the Future through Experiential Learning

Government’s Role in Encouraging Financial Capability Services in Schools

Due to the multiple parties and stakeholders involved in integrating financial capability services into schools, government is key to coordinating between private and public sectors. The federal government has taken a role in encouraging financial capability service integration into schools through two vehicles: the President’s Advisory Council on Financial Capability for Young Americans, which studied how to best address financial capability issues in young people, and the Financial Literacy and Education Commission (FLEC), which creates the national strategy on financial education, manages MyMoney.gov and facilitates public meetings highlighting new research and practices in areas of financial literacy and education.9

STATE REQUIREMENTS FOR HIGH SCHOOL STUDENTS

ENHANCING FINANCIAL EDUCATION WITH BANKING ACCESSFinancial education is strengthened when it is combined with access to financial products. When students learn without application, the knowledge can be misunderstood or forgotten. Like learning how to play the bassoon without having the instrument, financial habits and norms can only be developed and reinforced through practice. That practice leads children to build positive financial behaviors at key stages of their development and turning those behaviors into lifelong habits. Though more research is needed, initial findings also show a possible link between in-school banking and improved educational outcomes.10

their attitudes, habits and skills around finances. Experiential learning opportunities can allow youth to practice skills using the knowledge they are acquiring in the classroom. In addition to gains in financial knowledge, repeated experiential learning opportunities are likely to help young people develop money management skills and to help transform those skills into habits. Opportunities for reflection and feedback encourage them to make financial decisions that are in line with their personal attitudes and values. With a method of delivery tailored to the developmental stages of children and youth, financial capability services can enhance school curricula and create a foundation for every young person to achieve a greater state of financial well-being in adulthood.

The primary goal of developing financial capability in young children is to help them build positive financial habits and norms. While there is a need for more research to identify what services are most effective in elementary school, we know that pairing financial education with access to accounts (e.g., Children’s Savings Accounts, or CSAs) and real-world financial simulations can help elementary school students start to think about their financial goals and build financial habits by practicing financial behaviors.

Require personal finance course

Require economicscourse

Require both courses

Source: Survey of the States, 2016.

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INCREASING FINANCIAL WELL-BEING THROUGH INTEGRATION

Emerging evidence points to the benefit of combining education and banking account access. Commissioned by the U.S. Department of the Treasury, the Assessing Financial Capability Outcomes (AFCO) project was a two-year pilot, beginning in the 2011-2012 school year, designed to test the impact of financial education and savings account access in schools. With sites in the school districts of Eau Claire, Wisconsin, and Amarillo, Texas, financial education was paired with access to a school banking program and encouragement to start saving. While both the education and access components had positive results separately, they showed the best results when the financial education was combined with access to a savings account.

Financial education improved students’ knowledge and attitudes about finances while the school-based banking increased the number of savings accounts that were opened and improved the students’ attitudes toward banking and financial institutions more generally. The schools also offered some students a financial incentive, increasing account uptake even more.11 Applying knowledge to action reinforces financial education and builds skills that students can use throughout their lives. Through this pairing, young people have access to real-world financial experience and knowledge to draw on once they become adults.

BUILDING SAVINGS AND COLLEGE EXPECTATIONS WITH CSAsBuilding college savings in the earliest years of a child’s life gives young people a greater chance of attending college. A particular type of account that could be integrated into school settings is a CSA, a tool to develop a child’s understanding and ability to save toward a long-term goal, primarily college. CSAs can be established from birth to the age of 18, and funds are usually earmarked for postsecondary education.

Saving in a CSA provides opportunities for children and families to start saving and build long-term savings habits, but CSAs have also been demonstrated to affect a child’s future orientation, a crucial aspect of executive function and positive financial attitudes.12 The importance of CSAs may be less about the dollar amount saved for college—when a child has savings for her college education, it raises expectations that she will one day attend college. Compared to those without college savings, one study showed that children from low- and moderate-income households with college savings from $1 to $499 were more than three times more likely to attend college and more than four times more likely to graduate from college.13 Research also finds that even parents raise their expectations when their children have a CSA. Initial findings from a study on the SEED OK (Saving for Education, Entrepreneurship and Downpayment for Oklahoma Kids) program showed that parents’ expectations for their children’s education increased when their child automatically received an account at birth that was seeded with $1,000.14 Having a college savings account can be a child’s first positive step towards believing they will get a higher education.

Schools are key partners around CSA programs because they are already in regular communication with parents and students so can easily take part in engaging families. They also have data, such as names and dates of birth, on their students to facilitate features like automatic account opening. Similar to other in-school banking programs, CSAs can be used as experiential learning opportunities and paired with financial education. The hands-on savings experience alongside financial education can give young people a deeper understanding of what it means to save towards a long-term goal.15

Accessing Financial Capability Outcomes (AFCO) Project Results

Improved student scores on financial tests

Improved attitudes around saving money

Increased number of students banked

Increased number of deposits into

accounts

A+

Source: Financial Education & Account Access Among Elementary School Students, 2014.

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Corporation for Enterprise Development Leveraging Schools to Help Students Reach Financial Success

High School: Supporting Independent Financial Decision-Making and Goal Setting with Mentoring and Matched Savings

Many CSA programs help youth or their families start accounts with an initial “seed” deposit and family and friends, along with the child, can contribute.16 Several states have created accounts that begin in kindergarten or at birth. For instance, starting in 2013, Nevada began putting $50 in an account for every kindergartener in the public school system.17 The program, known as College Kick Start, creates accounts automatically through school enrollment and starts families towards 13 years of saving for their children’s education.18 Cities like St. Louis and San Francisco have started accounts for their kindergarteners as well. Currently, 42 CSA programs operate in 29 states.19

Financial incentives can be raised through a variety of efforts and partnerships. For instance, St. Louis College Kids raises funds for CSA deposits through parking fees collected by the St. Louis Treasurer’s Office.20

GIVING YOUNG STUDENTS A GLIMPSE INTO THE (SIMULATED) REAL WORLDIf students do not have access to actual accounts, simulated real-world programs can allow students to experience adult financial scenarios. These programs can be a safe space where children can practice and experiment with financial behaviors and risks without negative consequences. Students can get a sense of what it is like to make financial choices in the real world and how those choices can affect their lives. While the AFCO pilot showed the effectiveness of real-life experiences paired with financial education, simulations of real scenarios can similarly build positive financial habits and norms.

Connecting financial education with these simulated experiences gives room for practice and growth. Junior Achievement (JA) USA focuses on building financial literacy, career development and entrepreneurship through a variety of programs for millions of students each year. The JA Finance Park experience focuses on seventh- and eighth-graders and begins with 12 lessons on income, debit and credit, savings, investing and risk management, and budgeting taught by a classroom teacher. Alongside those lessons, students take part in a real-life financial simulation in JA Finance Park where they take on an individual’s profile that includes an income, a family, a job and debt. In the simulation, the student builds skills like budgeting, saving and investing to get through real-life challenges.21 A national impact evaluation shows that those who participated in JA Finance Park increased their financial knowledge and literacy, demonstrated improved attitudes and felt that their experience was valuable in understanding what financial challenges they would face as adults.22

Another example is Vanguard’s My Classroom Economy (MCE) which brings simulated, real-world experiences to the inside of the classroom. In this classroom-based economy, elementary school students can earn money through specific duties, rent or buy their desks, pay fees for infractions, receive bonuses for good behavior and make purchases in a classroom store and auction. Through this classroom management system, students are able to build financial skills.23 A field study showed that students who took part in MCE for ten weeks improved their financial knowledge, ability to budget and financial socialization.24

High school is an important time to save for the future and start to prepare to make adult decisions, such as finding a job or starting college. It is at this point when young people need to determine their personal financial needs and goals. While some will be focused on building savings for bigger items such as a car or security deposit, many others will be occupied with understanding how to finance a postsecondary education, including filling out the Free Application for Federal Student Aid (FAFSA) and taking out student loans.

Source: Small-Dollar Children’s Savings Accounts, Income, and College Outcomes, 2013.

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INCREASING FINANCIAL WELL-BEING THROUGH INTEGRATION

BUILDING FINANCIAL DECISION-MAKING SKILLS AND GOAL SETTING WITH PEER MENTORSPairing financial education with goal setting can build financial knowledge and improve the decision-making skills of young people. Peer learning can be an effective, high-touch method by which to share financial knowledge and build financial skills for the future of both the mentors and the mentees. Peer mentors can be trained to be financial coaches for their mentees and help younger students focus on self-identified goals. When mentors come from similar backgrounds and share similar goals as their mentees, they can be great role models. This mentoring concept catches high schoolers right as they are beginning to make important adult life decisions related to jobs, colleges and families. Mentees have a role model who is just a few steps beyond them in those financial decisions.

A peer-to-peer model allows young people to connect with others their age around personal finance issues in a non-threatening way. There are countless ways to customize this model throughout the education system. Moneythink is an example of a program that trains college students to become financial mentors for high school students. Founded by a group of undergraduate students at the University of Chicago, Moneythink develops the capacity of mentors to focus on helping high school students take action toward their financial goals and receive real-time feedback through a weekly program in small groups over a period of 21 weeks. These regular meetings build “trust and accountability.”25 High school students also receive financial coaching from college students through an interactive mobile app where youth can engage in challenges, facilitated by mentors, which build financial awareness, skills and habits for saving. In their first year (2012-2013), there was a 62% growth in mentees’ understanding of credit card debt, and 65% of mentees felt more prepared to be financially independent.26 Mentorship opportunities allow both groups to sharpen their knowledge and skills for future financial decisions in life.

Financial Coaching

Financial coaching typically consists of one-on-one sessions with a coach in which participants define their own goals and coaches provide a structure, along with encouragement and monitoring, for participants to develop their own solutions and change their behaviors. While financial coaching may not be appropriate for elementary school and middle school students, setting a structure around goals for older high school students can be helpful as those students are thinking about their next steps. For more on financial coaching in general, see J. Michael Collins’ chapter, “Beyond Financial Education: Supporting Positive Financial Behaviors through Financial Coaching,” in What It’s Worth.27

GROWING COLLEGE SAVINGS WITH FINANCIAL CAPABILITY SERVICES AND MATCHING FUNDS

No matter what their post-graduation plans are, every young person can benefit from improved financial knowledge and decision–making skills, including how to manage their money, follow a budget, access financial products when they turn 18 and know which financial products to avoid. Building positive financial habits through mentorship programs and using asset-building programs to raise funds for college can prepare young people for their next steps.

Many students leave our education system with more than just diplomas—they carry heavy loads of debt from their postsecondary education. Seven out of ten college graduates from the class of 2015 have student loan debt with an average of $30,100 per person.28 This debt can affect young people’s ability to get by financially, let alone build assets. Many feel that student loan debt is a big reason why fewer young people today own homes, purchase stock or even buy cars.29 In fact, when surveyed, 71% of non-homeowners point to their student loan debt as the reason why they can’t purchase a home.30 Due to this lack of assets, young people have less of a financial safety net than previous generations. Some students are unable to graduate due to costs of tuition, housing and other essentials. Starting students on saving before college and building their financial capability in other ways can lower debt and build positive financial habits like saving toward long-term goals.

71% of non-homeowners point to their student loan debt as the reason why

they can’t purchase a home

Source: Student Loan Debt and Housing Report, 2016.

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Corporation for Enterprise Development Leveraging Schools to Help Students Reach Financial Success

Incentivizing high schoolers to begin to save, and coupling that with financial capability services, helps students graduate from college with less debt. Starting in high school but continuing through college, Arizona nonprofit Earn to Learn partners with the three public universities in the state to incentivize students to save for their college years. Over two academic semesters, eligible students save $500 in Individual Development Accounts (IDAs) with an eight-to-one match from a combination of federal funds paid by the Assets for Independence (AFI) program and university financial aid funds. In total, the students earn $4,000 to go toward education expenses—$2,000 from federal dollars and $2,000 from their university—to supplement their $500 in savings. Depending on funding availability, the students may be able to continue to receive these matches throughout their four years of college. Students are able to build their savings skills and increase their financial knowledge by receiving financial advice and assistance during their participation in the program.31

While a more robust study would need to be done to assess this program’s strength, early data are promising. Initial Earn to Learn program data show that persistence rates among participants are at 98% and that 89% of participants meet their savings goal each month.32 These students leave college with less debt, are more likely to stay in college and are building their financial capability.33 News of this model is spreading, and other states are starting to take notice. To date, 18 states have reported that they are hoping to replicate the program.34

Barriers to Integrating Financial Capability Services into Schools

Even though integrating financial capability services into schools is key to helping our young people build a strong future, there are some common barriers that educational systems face when bringing in these services:

1. Educational staff may not have the capacity or experience to implement financial capability services. Teachers can be overburdened and under resourced—they are responsible for requirements in countless areas throughout school curricula. This can make deploying new services and new materials difficult. In addition, like many social service providers, teachers and other educational staff are not necessarily experts in financial capability. They may be limited in their knowledge, skills or even their own access to resources. There are multiple ways to ease these barriers, such as by connecting schools with materials, training and strategic partnerships.

In the AFCO pilot, teachers were given financial education to help them become more comfortable with the material, speaking to the commitment of the school districts involved.35 Schools also partnered with financial intuitions to provide savings accounts to students. Another possibility is using mentors to build financial capability, such as with JA Finance Park and Moneythink, or bringing in volunteers who are comfortable discussing financial topics with students. This allows students to receive financial capability services without burdening school staff. The federal government could play a direct role in recruiting and training volunteers, or they could play an indirect role by simply facilitating partnerships with existing financial capability service providers.

2. Schools do not have adequate funding to integrate financial capability services. The wide range of priorities for elementary schools, middle schools and high schools leave little funding left for financial capability services. Some of the most promising services are matched savings programs like CSAs or IDAs that require a substantial amount of funding. Schools may not even have the funding to put together volunteer mentor programs or other resources to facilitate financial goal setting and simulations for their students. The federal government could address many of these issues by establishing a universal, nationwide CSA program or by expanding funding to meet the strong demand for the Earn to Learn program. Partnerships with financial capability

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INCREASING FINANCIAL WELL-BEING THROUGH INTEGRATION

service providers or even local banks or credit unions can also help ease the financial burden on schools of providing these important benefits to students.

3. School administrators may not understand how to decide on and implement the best financial capability services for their schools. School administrators do not necessarily know how to pick and put into place the right financial capability services for their schools. More publicity and targeted outreach is needed by government agencies like the U.S. Department of the Treasury and the CFPB to stress the importance of these services and highlight promising practices and latest innovations. They can also provide detailed resources on how to get started with these services, establish helpful partnerships if necessary, and measure success and progress. One example for guidance on designing CSA programs is Investing in Dreams: A Blueprint for Designing Children’s Savings Account Programs.36

Although primarily written with policymakers in mind, another resource, Advancing K-12 Financial Education: A Guide for Policymakers, gives direction on how to build financial education in elementary school, middle school and high school.37 Helping schools understand the impact of these programs and identify the right resources, promising practices and effective partnerships is essential for these services to achieve greater scale and reach more of the students who could benefit from increased financial capability. If deployed nationwide by the federal government, programs like universal CSAs and Earn to Learn could also provide off-the-shelf infrastructure and funding that would make it much easier for school administrators to bring the promising practices in financial capability directly to their students.

4. More research is needed for schools and financial capability service providers to identify new innovations in the field and discover potential additional benefits. While many promising strategies have been identified in this field, further research is still needed to identify best practices, how to best implement these strategies, what the best metrics are for measuring progress and additional potential benefits for these practices. Testing out different approaches through strong research methods, such as randomized control trials (RCTs), can help identify which financial capability services are most effective and at what age.

The AFCO pilot, mentioned previously, is an example of research that determined effective practices such as pairing education with saving and incentivizing students to save. As mentioned earlier, research around CSAs also show the impact of college savings in the likelihood that young person will attend college.38 Further research may also confirm that integrating financial capability services into school systems improves programmatic outcomes, like improving academic performance or persistence toward a degree, as research suggests it does with workforce development and health programs.39

Policy Recommendations for Integrating Financial Capability Services into Schools

To help schools implement financial capability services, the federal government needs to advance research, encourage innovation and help scale promising practices. The federal government must prioritize the integration of financial capability services into schools by identifying standard metrics for evaluation, highlighting innovative practices, facilitating partnerships and providing funding to scale promising programs. These investments in our children and schools can help improve overall outcomes that lead to financial well-being for low- and moderate-income households in the long run.

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Corporation for Enterprise Development Leveraging Schools to Help Students Reach Financial Success

To support and promote integration efforts throughout the country, the federal government should take the following steps:

■ The U.S. Department of the Treasury and the CFPB should work with partners in the field and researchers to identify and promote standard metrics for evaluating youth financial capability. It is difficult to measure prog-ress, let alone identify best practices, without at least some standardized metrics for evaluation. While relevant metrics might vary depending on the goals of the program, specifics of the local community or the ages of the children, being able to identify appropriate metrics backed by research is integral for program success and difficult for schools to do on their own. Therefore, the CFPB and the Department of the Treasury, along with other relevant government agencies through a body like the Financial Literacy and Education Commission (FLEC), should work together to identify and highlight common and effective metrics that schools and financial capability programs should be utilizing or at least considering in designing and expanding their services. One example would be the study conducted by the Center for Financial Security at the University of Wisconsin-Madison on financial educa-tion outcome measures.40 These agencies should also fund research to develop new or validate existing metrics, if needed in certain areas or communities.

■ The U.S. Department of the Treasury and the CFPB should fund research around integrating financial capa-bility services into schools. These agencies should fund more research to identify new innovations and potential additional benefits around financial capability services in schools. Ultimately, this research can help highlight the multifaceted value of these services and encourage new methods for delivering them to a broader audience. This research can help build the body of knowledge and practice in the field overall, as well as help schools find effective services and partners. One example of how to encourage this research and innovation is by hosting a challenge, similar to the MyMoneyAppUp Challenge that the Department of the Treasury hosted in 2012, which had groups around the US compete for the best idea and design proposals around integrating financial capability services into schools.41 This research could also help strengthen the case for these services overall by examining the relationship between financial capability and educational outcomes for potential benefits. Positive findings here could further increase school administrators’ interest in financial capability services.

■ The U.S. Department of the Treasury and the CFPB should highlight promising practices, new innovations and successful partnerships in the field. As noted above, it can be challenging for school staff and administrators to have the right information and resources to integrate financial capability services into their schools. Government agencies like the Department of the Treasury and the CFPB can play a key role in overcoming these barriers by using their positions to raise awareness of promising practices, encourage new innovations, and create partnerships between schools and financial capability service providers. FLEC is one great vehicle for doing this. It brings to-gether federal agencies as well as stakeholders such as state and local governments, researchers, financial capability providers and educational institutions to highlight promising financial capability services. By featuring unique partnerships in the financial capability space, FLEC identifies promising models of financial capability integration. For example, in a 2016 public meeting, FLEC had a panel highlighting “Frameworks and New Findings for Youth Financial Capability,” with researchers and practitioners identifying recent studies and innovations.42 By continu-ing to bring these models to the national stage in meetings and through publications, FLEC can break down silos and help schools and financial capability service providers connect to scale up programs that work and collaborate on possible new programs. FLEC and, more broadly, the Department of the Treasury and the CFPB, can do more outreach to bring elementary schools, middle schools and high schools into these conversations to entice them to think about these services. These agencies can go even further to offer guidance around design and implementation of these programs—another barrier for schools.

■ The Corporation for National and Community Service (CNCS) should create an AmeriCorps program for college mentors providing financial capability services. As mentioned previously, using college mentors to build the financial capability of younger students has been found to be a highly effective strategy. It also has the added bonus of relieving schools from having to train or hire staff to deliver these services themselves. Rather than relying on teachers to provide these services, mentors can increase the capacity of schools to build the financial habits and knowledge of young people. The AmeriCorps program provides a proven model and vehicle for training and deploying an effective group of young volunteers at scale. The CNCS has created programs to serve a variety of

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social needs and purposes for nonprofit organizations and financial capability services should be no exception. Volunteer mentors can be recruited and enticed by utilizing the Segal AmeriCorps Education Award given to AmeriCorps volunteers for their service to repay student loans or pay for qualified educational expenses.43 By incentivizing college students to mentor their younger counterparts, we can support schools and continue to build students’ financial capability as we lower the debt rates of college students post-graduation.

■ Congress should pass legislation similar to the USAccounts: Investing in America’s Future Act of 2015 (USAccounts Act), introduced in the 114th Congress. One of the biggest steps that the federal government can take to advance financial capability integration in schools is to provide children with an account in which they can save for their future. The USAccounts Act (H.R. 4045) would open a CSA for all children at birth with an initial deposit of $500. Low-income families would also receive matching funds for contributions that they make into the accounts. This would help children and their families start to save for college early in the lives. CSAs also can help raise expectations that a child will pursue higher education one day. As we previously mentioned, cities and states across the country have started to operate CSA programs, but the USAccounts Act would make CSAs available in all localities. It would address the funding and expertise barriers that many schools face in establishing their own programs. Schools could also then use these accounts as platforms to deliver a broad array of financial capability services, either directly or through partnerships.

+ +

EARN TO LEARN

Students annually save

$500

$2000from federal government each year

$500 from their universities each year

$2000maximum deposited annually from child, family and friends

Qualifying families receive additional tax credits every year of

$500 + + +

Children receive initial deposit of

$500

$500 yearly match from the Departmentof Treasury

USACCOUNTS ACT

■ Congress should fund Earn to Learn nationwide and provide opportunities for robust evaluation. Expanding the Earn to Learn program is another step the federal government can take to make it easier for schools to deliver financial capability services. Earn to Learn combines access to incentivized savings accounts with financial capability services providing schools with a readymade infrastructure and funding for integrating financial capability. It allows high school and college students to build financial knowledge and skills while making headway into increasing their savings for college and lowering their potential debt burden after they graduate from a higher education program. Making use of federal and university funds incentivizes students without straining high schools’ limited resources. Broadening the scale of the program will also allow for more experimentation and innovations to be discovered so that the program can continue to improve. Funding should be provided for researchers to conduct a robust evaluation of the program as well so that best practices from across the country can be identified and shared.

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Corporation for Enterprise Development Leveraging Schools to Help Students Reach Financial Success

Conclusion

Acknowledgements

Endnotes

The authors would like to thank their colleagues at CFED who provided helpful edits, comments and guidance throughout this process, including Parker Cohen, Jeremie Greer, Kate Griffin, Melissa Grober-Morrow, Shira Markoff and Kasey Wiedrich. We are also thankful to Roberto Arjona, Sandiel Grant and Sean Luechtefeld on CFED’s Communications team for their efforts in producing this publication.

Lastly, many thanks to Andra Armstrong of Civic Nation for her feedback on this brief.

Young people are in need of guidance and skill-building opportunities to help them understand and apply good financial behaviors. As young adults, they face barriers such as low-wage jobs and predatory products in their quest for financial well-being. Those hurdles, alongside a lack of financial capability, can lead to a greater reliance on government benefits and impact the ability of young adults to start families, purchase homes and save for retirement.

Schools can integrate programs that align with youth financial capability developmental stages to support young people’s growth of attitudes, habits, skills and knowledge to help them achieve financial well-being as adults. The federal government has a key role to play in advancing this important work. It needs to encourage school districts to implement financial capability programs that best make use of how young people learn by focusing on key developmental learning stages, such as building financial habits and norms in the elementary and middle school years and financial knowledge and decision-making skills in the high school years. Identifying and scaling those programs through research and practice will allow more students the opportunity to build their financial capability and, in turn, their long-term financial well-being.

1 Alicia Atkinson, Meeting People Where They Are (Washington, DC: CFED, 2014), http://cfed.org/assets/pdfs/Meeting_People_Where_They_Are.pdf; Alicia Atkinson and Jeremie Greer, Gaining and Retaining Employment (Washington, DC: CFED, 2015), http://cfed.org/assets/pdfs/Gaining_and_Retaining_Employment.pdf; Alicia Atkinson and Jeremie Greer, Gaining and Sustaining Housing Stability (Washington, DC: CFED, 2015), http://cfed.org/assets/pdfs/Gaining_and_Sustaining_Housing_Stability.pdf.

2 Joanna Ain, Alicia Atkinson, Parker Cohen and David Newville, Integrating Financial Capability Services into Community Health Centers (Washington, DC: CFED, 2016), http://cfed.org/assets/pdfs/Integrating_FinCap_Services_into_Community_Health_Centers_brief.pdf.

3 Judy T. Lin, Christopher Bumcrot, Tippy Ulicny, Annamaria Lusardi, Gary Mottola, Christine Kieffer and Gerri Walsh, Financial Capability in the United States 2016 (Washington, DC: FINRA Investor Education Foundation, 2016), 24, http://ifie.org/pdfs/NFCS_2015_Report_Natl_Findings_FINRA.pdf.

4 These behaviors include paying minimum payments, paying late fees and using cash advances on credit cards. See Ibid., 22, 7.

5 Ibid., 25.

6 Building Blocks to Help Youth Achieve Financial Capability (Washington, DC: Consumer Financial Protection Bureau, 2016), 9-10, https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/092016_cfpb_BuildingBlocksReport_ModelAndRecommendations_web.pdf.

7 Pamela Chan and Emily Hoagland, Imparting Early Lessons about Personal Finance (Washington, DC: CFED, 2016), 24, http://cfed.org/assets/pdfs/Poverty_Interrupted.pdf.

8 Survey of the States (New York: Council for Economic Education, 2016), 1, http://councilforeconed.org/wp/wp-content/uploads/2016/02/sos-16-final.pdf.

9 “President’s Advisory Council on Financial Capability for Young Americans,” U.S. Department of the Treasury, January 25, 2017, https://www.treasury.gov/resource-center/financial-education/Pages/New-President’s-Advisory-Council-on-Financial-Capability-for-Young-Americans.aspx; “Financial Literacy and Education Commission,” U.S. Department of the Treasury, January 25, 2017, https://www.treasury.gov/resource-center/financial-education/Pages/commission-index.aspx.

10 Gina Chowa, et al., Impacts of Financial Inclusion on Youth Development: Findings from the Ghana YouthSave Experiment (St. Louis, MO: Center for Social Development at Washington University in St. Louis, 2015), 6, https://csd.wustl.edu/Publications/Documents/RR15-35.pdf. Banks are incentivized through the Community Reinvestment Act (CRA) to offer bank in school programs. For more information and a list of participating banks, see “Youth Savings Pilot Program,” FDIC, January 25, 2017, https://www.fdic.gov/consumers/assistance/protection/depaccounts/youthsavings/index.html.

11 Kasey Wiedrich, J. Michael Collins, Laura Rosen and Ida Rademacher, Financial Education & Account Access Among Elementary School Students (Washington, DC: CFED, 2014), http://cfed.org/assets/pdfs/AFCO_Youth_Full_Report_Final.pdf.

Corporation for Enterprise DevelopmentLeveraging Schools to Help Students Reach Financial Success 12

INCREASING FINANCIAL WELL-BEING THROUGH INTEGRATION

12 Building Blocks to Help Youth Achieve Financial Capability, 11.

13 Among other variables, this study controlled for household income, net worth, education and liquid assets. See William Elliott, Hyun-a Song and Ilsung Nam, Small-Dollar Children’s Savings Accounts, Income, and College Outcomes (St. Louis, MO: Center for Social Development at Washington University in St. Louis, 2013), 3, https://csd.wustl.edu/publications/documents/wp13-06.pdf.

14 Sondra G. Beverly, Margaret M. Clancy and Michael Sherraden, Universal Accounts at Birth: Results from SEED for Oklahoma Kids (St. Louis, MO: Center for Social Development at Washington University in St. Louis, 2016), 6-7, https://csd.wustl.edu/Publications/Documents/RS16-07.pdf.

15 Shira Markoff and Dominique Derbigny, Investing in Dreams: A Blueprint for Designing Children’s Savings Account Programs (Washington, DC: CFED, 2015), 81, http://cfed.org/programs/csa/investing_in_dreams.pdf.

16 Ibid., 124.

17 529 plans are educational savings plans that help families put aside money for their children’s future. See “What Is a 529 Plan?” Savingforcollege.com, http://www.savingforcollege.com/intro_to_529s/what-is-a-529-plan.php.

18 “Nevada College Kick Start,” Nevada State Treasurer, January 25, 2017, http://collegekickstart.nv.gov/.

19 A Growing Movement: The State of the Children’s Savings Field 2016 (Washington, DC: CFED, 2016), 1, http://cfed.org/assets/pdfs/2016_State_of_the_Field_Highlights_final.pdf.

20 Markoff and Derbigny, Investing in Dreams, 94.

21 KPMG Foundation Sponsored Curriculum Evaluation JA Finance Park: Final Report (Colorado Springs, CO: Junior Achievement USA, 2016), 2, https://www.juniorachievement.org/documents/20009/133368/JA+Finance+Park+Evaluation+Report.

22 Ibid., 1.

23 Mike Batty, J. Michael Collins, Collin O’Rourke and Elizabeth Odders-White, Evaluating Experiential Financial Capability Education: A Field Study of My Classroom Economy (Madison: Center for Financial Security at the University of Wisconsin-Madison, 2016), 3, https://centerforfinancialsecurity.files.wordpress.com/2016/10/mce-report-final.pdf.

24 Ibid., 24.

25 For more information about Moneythink, visit their website at http://moneythink.org/.

26 “The Stories/The Numbers,” Moneythink, March 27, 2017, http://moneythink.org/our-program/impact-numbers/.

27 J. Michael Collins, “Beyond Financial Education: Supporting Positive Financial Behaviors through Financial Coaching,” in Laura Choi, David Erickson, Kate Griffin, Andrea Levere and Ellen Seidman (eds.), What It’s Worth: Strengthening the Financial Future of Families, Communities and the Nation (San Francisco: Federal Reserve Bank of San Francisco and CFED, 2015), 179-186, http://www.strongfinancialfuture.org/essays/beyond-financial-education.

28 Debbie Cochrane and Diane Cheng, Student Debt and the Class of 2015 (Oakland, CA: Institute for College Access & Success, 2016), 1, http://ticas.org/sites/default/files/pub_files/classof2015.pdf.

29 Phillip Longman, “Wealth and Generations,” in Laura Choi, David Erickson, Kate Griffin, Andrea Levere and Ellen Seidman (eds.), What It’s Worth: Strengthening the Financial Future of Families, Communities and the Nation (San Francisco: Federal Reserve Bank of San Francisco and CFED, 2015), 245-246, http://www.strongfinancialfuture.org/essays/wealth-and-generations/.

30 Student Loan Debt and Housing Report 2016 (Washington, DC: National Association of Realtors and SALT, 2016), 2, http://www.realtor.org/reports/student-loan-debt-and-housing-report.

31 For more information about Earn to Learn, visit their website at http://earntolearn.org/.

32 “2016.12.31 Statewide Program Update,” Earn to Learn, March 27, 2017, http://earntolearn.org/wp-content/uploads/2017/02/earn-to-learn-statewide-program-update.pdf.

33 “Earn to Learn’s Students,” Earn to Learn, March 27, 2017, http://earntolearn.org/our-work/impact/.

34 The authors extend their gratitude to Kate Hoffman from Earn to Learn for sharing information about the program.

35 Wiedrich, Collins, Rosen and Rademacher, Financial Education & Account Access, 32.

36 Markoff and Derbigny, Investing in Dreams.

37 Advancing K-12 Financial Education: A Guide for Policymakers (Washington, DC: Consumer Financial Protection Bureau, 2015), http://files.consumerfinance.gov/f/201504_cfpb_advancing-k-12-financial-education-a-guide-for-policymakers.pdf.

38 Elliott, Song and Nam, Small-Dollar Children’s Savings Accounts, 3; Elliott and Beverly, The Role of Savings, 1.

39 Rita Bowen, Kori Hattemer and Kate Griffin, Building Financial Capability: A Planning Guide for Integrated Services (Washington, DC: U.S. Department of Health and Human Services, 2015), 12, https://www.acf.hhs.gov/sites/default/files/ocs/afi_resource_guide_building_financial_capability_final.pdf.

40 Mike Batty, J. Michael Collins and Elizabeth Odders-White, Validity and Reliability of Elementary Student Financial Education Outcome Measures (Madison: Center for Financial Security at the University of Wisconsin-Madison, 2016), https://centerforfinancialsecurity.files.wordpress.com/2016/09/validityreliabilitymeasures_final.pdf.

41 “Treasury Launches MyMoneyAppUp Challenge,” U.S. Department of the Treasury, January 25, 2017, https://www.treasury.gov/press-center/press-releases/Pages/tg1625.aspx.

42 “November 3, 2016 FLEC Meeting,” U.S. Department of the Treasury, January 25, 2017, https://www.treasury.gov/resource-center/financial-education/Pages/flec11032016.aspx.

43 “Using Your Segal AmeriCorps Education Award,” Corporation for National & Community Service, January 25, 2017, https://www.nationalservice.gov/programs/americorps/alumni/segal-americorps-education-award/using-your-segal-education-award.