here is this misguided notion that economics is just what they do at M.I.T. We say, 'not at all.'" Robert Duvall is optimistic, but acknowledges the uphill climb his cause faces. The Director of the National Council on Economics and Education (NCEE) is talking about the results of a recent Harris Poll indicating that a shade under half of adults questioned could not define an annuity, and three-quarters did not know that cash kept at home would decrease in real value over time. The NCEE's core mission is built around the idea that personal finance and economics need to be an integral part of the core curriculum, just as math, English and physical education are. Managing finances, the NCEE says, should not be an optional skill; it should be included in the testing requirements for graduation.
The motto of today's "ownership society" could well be, "You break it, you bought it." The closest most of today's students will come to an old-fashioned pension is to read about it in a history book. Companies are running--not walking--away from the historic pact they once had with their employees.
Meanwhile, according to the Massachusetts Department of Education, the average credit card debt for college students is $2,327, with 21 percent carrying a balance of between $3,000 and $7,000. More students drop out of college due to their personal accumulated debt than for academic reasons. (In the recent documentary film, "Maxed Out," two grieving mothers tell how credit card debt drove their college kids to suicide.)
"We don't favor preaching a view, but having students make sound decisions oriented to a free market economics," explains Duvall. "It is about just being self-reliant, responsible citizens, who--in order to be a part of the ownership society--need to understand at a basic level how that wealth was made and what it means."
Personal finance is as important as history or economics, he believes. The NCEE devised the first national voluntary standards for classroom study of the subject in 1997. In 2006, 14 states required high school students to study concepts such as opening bank accounts and maintaining healthy credit scores before graduating--double the number of states two years ago, according to the NCEE and Citigroup's Office of Financial Education.
Ellen Schweitzer, an economics teacher at New York's Stuyvesant High School, notes that being a specialized school within the New York City system, Stuyvesant teaches the AP Economics Curriculum, which emphasizes--as most such courses do--economic theory over street-smart financial knowledge. But Stuyvesant also offers an elective called "Wall Street," which handles matters germane to the investment world. Such hands-on, real-life courses dealing in finance are catching on and serve as a springboard to participation in events like the National Economics Challenge. Created six years ago by the NCEE and the Goldman Sachs Foundation, this annual high school competition might leave skeptics with a newfound sense of optimism about the real-life readiness of at least some students. The Challenge divides teams from high schools across the country into four regions--East, West, Midwest and the Heartland. Competitors are quizzed on macroeconomics, microeconomics, international economics and current events.
Last years winning team--all female, by the way--came from Hibbing, Minn., pop. 18,000 and Bob Dylan's hometown. Economics teacher Scott Wolla, who coached the winners, says, "We use real-life situations in a parallel course and in our college in classroom program. Kids track stocks over a 13-week period and get into concepts like beta and alpha. One girl from last year's team was at first not interested in this type of study, but is now at a top school majoring in business." Wolla doesn't shy away from commenting on the gender of his 2006 team: "It is unusual in that the study of economics and business has until recently skewed male," he says "That seems to be changing."
But gender aside, progress is slow. Last year, high school students failed a 2006 quiz from the JumpStart Coalition for Personal Financial Literacy, correctly answering an average of only 52.4 percent of questions about credit cards, insurance, retirement and savings. The results were well below the average 57.3 percent scored by high school students in JumpStart's 1997 poll, but up from a 50.2 percent low in 2002.
Visa and Citigroup, among other financial institutions, are trying to engage students by incorporating games into free personal-finance curricula they provide to schools. "Teachers tell us that financial literacy is important, but it's deadly dull," says Jason Alderman, Visa's director of financial education. But some consumer advocates question whether for-profit financial companies are the best resources for an education in personal finance.
Moreover, while "Improving [financial] knowledge is a necessary first step, it's not sufficient," says Travis Plunkett of the advocacy group Consumer Federation of America. "There needs to be a focus on measuring whether these programs lead to positive financial behavior" among young adults.
Robert Margolis is a New York-based writer and history teacher.