California has officially passed Assembly Bill 2927 (AB 2927), which mandates the introduction of financial literacy courses in high schools by the 2027-2028 school year. Advocates believe this new requirement will equip students with essential skills for navigating significant financial decisions, such as funding college tuition, understanding taxes, and making investments.
Key Provisions of AB 2927
The bill, authored by Assembly member Kevin McCarty (D-Calif.), requires high schools to offer a semester-long personal financial literacy course by the 2027-2028 school year. This course will become a graduation requirement starting in the 2030-2031 school year.
Natalie Shin, McCarty’s Legislative Director and lead staffer on AB 2927, noted that the office has been working on this bill for two years. An earlier version, AB 984, proposed in 2023, faced significant cuts from the California State Assembly’s Committee on Education. Instead of pushing for a reduced version, McCarty opted to refine the bill for a second attempt in 2024, collaborating closely with Next Gen Personal Finance, a nonprofit organization experienced in implementing financial literacy legislation in other states.
“It’s unacceptable that students have to go on TikTok to get any sort of formal financial education,” Shin remarked. “They should be able to learn that at their school. Now having my own career, I wish I understood investing in stocks and retirement funds. This is a time in students’ lives where they’re applying to college, and a lot of people don’t know what the difference is between a scholarship and a student loan, and that’s a big deal.”
Perspectives from MVHS
Hands-On Learning Approach
Jaden Bae, the president of the MVHS DECA club, emphasizes the need for a “hands-on approach” in teaching financial literacy. His involvement in DECA and FBLA competitions has highlighted the importance of applying knowledge practically rather than just memorizing terms.
“Sometimes kids just start memorizing things on their own, word after word, term after term, and they don’t really know how to apply it in their own life,” Bae explained. “So when you throw them into a situation, they’re just like, ‘Oh, I know what it means, but I don’t know how to respond to it.’”
Concerns About Superficial Learning
AP Macroeconomics teacher Pete Pelkey expresses concern that the implementation of AB 2927 might lead to a curriculum focused on rote memorization and superficial teaching methods. He believes that financial literacy should encompass broader life skills and personal vision, rather than just vocabulary lists.
“The course becomes vocabulary lists that you have to memorize and Scantron tests that are perfunctory,” Pelkey stated. “This class should be about ‘How can you have a better life over the space of your entire life?’ That’s what financial literacy is. ‘What’s my vision for my future self?’”
Pelkey also notes that many teachers leading these courses may lack the necessary background in economics, potentially compromising the quality of education.
“Most of the people teaching economics in California, in a social studies class, are either history teachers, government teachers, or they’re not economists,” Pelkey pointed out. “Economists don’t become teachers; I’m one of the few. So we’re going to get people teaching this literacy thing that may not be financially literate themselves.”
Looking Ahead
Shin anticipates challenges as schools implement the new financial literacy requirement. She stresses the importance of allowing schools flexibility in incorporating the course into their existing graduation requirements, given the varied scheduling structures.
“We did our best to give schools as much time as we could, and we’re trying to provide them with the resources and everything they need,” Shin said. “I think it’s just going to fall on the state to make sure everything is financed properly.”
A representative from the Fremont Union High School District (FUHSD) declined to comment, stating that the district is still assessing the implications of AB 2927.
Conclusion
As California moves forward with AB 2927, the hope is that the implementation of financial literacy education will empower students to make informed financial decisions, ultimately preparing them for a more secure financial future. However, the effectiveness of this initiative will largely depend on the quality of the curriculum and the expertise of the educators delivering it.
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