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Financial Planning > College Planning > Student Loan Debt

Half of Students Receive Financial Literacy Education: Survey

By Emily Zulz

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John Hope Bryant thinks financial literacy is the new civil rights issue.

“To quote Ambassador [Andrew] Young … ‘to live in a free enterprise and to not understand the rules of free enterprise, just might be the next definition of slavery,’” Bryant told ThinkAdvisor.

Bryant is the founder, chairman and chief executive officer of Operation HOPE, a nonprofit private banker for the working poor, the underserved and struggling middle class. Operation HOPE is an organization — whose members include many banks and financial institutions — focused on empowering underserved communities.

(April is Financial Literacy Month. Find out which states rank highest and lowest for financial literacy.)

For the past five years, Operation HOPE has partnered with Gallup to create the Gallup-HOPE Index, which serves as an annual benchmark of the economic vitality of the nation’s young people.

“It’s a pulse of how we’re doing as a nation on this topic of financial inclusion and financial literacy,” Bryant said.

Results of the 2016 Gallup-HOPE Index, which is based on a sample of 1,006 students in grades five through 12 in the U.S., suggest that students’ attitudes and perception of their work and school lives are essentially unchanged since the inception of the study in 2011.

“We’re treading water on the issue of financial literacy because it’s not supported in any organized way,” Bryant said. “It’s done in a rag-tag fashion from school district to school district with no federal funding and no national coalition or organized support. It’s sort of bobbing along with no radical change in the number of percentage of kids that are financially literate.”

Approximately half of the students surveyed in 2016 (53%) agreed that their school teaches them about money and banking. These results are consistent with results from 2011.

“If the new president wants to do something positive, that’s actually in his wheelhouse, he should mandate that every child gets financial literacy education compliments of the federal government,” Bryant told ThinkAdvisor. “If he wants people to be sustainable, there you go. There’s a great 21st century version of social empowerment.”

Troubling in this year’s study is the falling number of students that plan to start their own business someday.

According to the study, nonwhite students in 2016 are less likely than they were in 2011 to agree that they plan to start their own business. Based on the 2011 Gallup-HOPE Index, nonwhite students (54%) were 15 points more likely than white students (39%) to agree that they plan to start their own business. But in 2016, 42% of nonwhite students and 40% of white students agreed that they plan to start their own business.

Bryant does find some outlier statistics in this year’s study that are promising.

For instance, the study finds that children from lower socioeconomic backgrounds are more likely to plan to start a business.

Students living in households with an annual income of less than $36,000 are more likely than students from households with an annual household income of $36,000 or more to agree that they plan to start their own business, according to the study.

“Kids from inner cities and rough neighborhoods have higher propensity to be entrepreneurs and small-business owners than their mainstream counterparts,” Bryant told ThinkAdvisor. “They’re more resilient, they’re used to change, they’re used to hard times. It’s harder for them to get a job so they got to go create a job.”

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