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Learning, with Interest

High school teachers gather at TC for a workshop on teaching financial literacy
High school teachers gather at TC for a workshop on teaching financial literacy

By Joe Levine

You’re a financial advisor who’s been given an hour to meet with Jerome Phillips, a (fictional) 25-year-old marquee NFL football player in the fourth year of a six-year $35 million contract. Phillips is a working-class kid from Brooklyn who doesn’t know anything about saving or investing. He doesn’t drink or do drugs or gamble, but he’s been running through his money – his current assets consist of $7 million sitting in a checking account. He’s worried about becoming the next Vince Young, the real-life star quarterback who ended up declaring bankruptcy despite inking a $34 million contract and earning another $30 million in endorsement deals with Reebok, Campbell’s Soup and other high-profile advertisers.

So how should Phillips save, invest and spend?

That was just one of the challenges posed to 50 New York City high school teachers who gathered at TC in July to attend the College’s first annual Financial Literacy Summer Institute. The Institute is the first fruit of Loot, Inc.org, a unique professional development program, in partnership with the non-profit Working in Support of Education (Wise), launched in July 2012 through a gift by longtime Teachers College Trustee Joyce B. Cowin (M.A. ’52).

(Check out WABC TV’s coverage of the Summer Institute and a conversation with Joyce Cowin about her “anti-snooker” campaign to make students financially literate.)

The Project could not be timelier. As depicted in “American Winter,” a documentary film watched by the teachers at the Summer Institute, the 2008 financial meltdown has left many formerly middle-class families without a safety net and strained the resources of social service agencies for the poor. Meanwhile, research has found that 23 percent of Americans genuinely believe that playing the lottery is their best retirement strategy. Studies also show that many corporate employees never bother to sign up for 401(K) plans and other financial benefits.

Yet despite the more than 800 financial literacy curricula in existence, many major cities – including New York – lack any central financial education resource for teacher professional development.  In fact, according to the Council for Economic Education, only 14 states currently require high school students to take a course in personal finance – one fewer than in 2009 – and during the past four years, three states have stopped requiring student testing in economics. Nor is it clear that just any course in financial literacy will make the right kind of difference. The results of research are ambiguous, but biennial surveys done by the Jump$tart Coalition for Personal Financial Literacy show that even semester-long high school classes devoted to personal finance may not raise the financial literacy scores of twelfth graders.

Enter the Loot, Inc.org Project, which, instead of handing teachers a ready-made curriculum, helps them to integrate important concepts about finance into history, social studies and other courses they already teach.

“We want to help teachers themselves better understand basic concepts such as banking, savings, consumption, borrowing, and investment and risk management,” says Anand R. Marri, TC Associate Professor of Social Studies & Education, who led the development of the Project in partnership with Wise. “We’re treating teachers as professionals by, in essence, saying, ‘You know what will work best in your classroom, with your students, whether you’re in Scarsdale or the South Bronx. Here are some different teaching strategies from which you can choose.”

The inaugural Summer Institute imparted those strategies through readings, screenings, lectures (including talks by Matt Yglesias, business and economics correspondent for Slate magazine, and Sam Stovall, chief investment strategist for Standard & Poor’s Equity Research Services), and through case studies centered on true-to-life “dilemmas.” Participants received a TC Certificate of Completion and had an opportunity to take wise’s Certification Test and earn a Certification in Personal Finance.

“We’ve learned that most traditional approaches to financial literacy don’t work – at least not when it comes to changing behavior in adults and children,” said Marri, who previously created a nationally adopted curriculum, Understanding Fiscal Responsibility, which focuses on the federal budget, national debt, and budget deficit. “This is really different than the other pedagogies that are out there.”

The teachers at the Summer Institute spent their first morning at TC discussing the practical implications of well-worn financial maxims such as “penny wise, pound foolish,” “if it sounds too good to be true, it is” and “by low, sell high.” Then  armed with laptops and a list of websites covering everything from how to request a free credit file disclosure to statistics on the average income for dancers and choreographers, they tackled the case studies.

In one scenario, Tom a 14-year-old who has already intensively researched his college options is trying to decide between a private institution – Xavier University – and a public one, Ohio State University.  He prefers Xavier for its name value, even though Ohio State is actually higher-ranked academically, but the cost is significantly higher. The teachers all recommended that he choose a public college, but that didn’t end the discussion – not least because tuition at OSU still left his parents with a $36,000 gap to fill over the next few years. Echoing the feelings of several of his colleagues, Howard Kudler, a teacher at Thomas A. Edison CTE High School, grumbled about a sense of over-entitlement among the current generation of teens.

“I’d have him start at a community college and then transfer if he’s really serious about it,” he said. “There’s no shame in that.”

Lillian Mitchell, a business teacher at Queens Vocational and Technical High School who runs simulated enterprise courses for her students, said that regardless of what choice the teachers recommended, the scenario was a particularly good one for her students. “At my school 50 percent of the kids are immigrants,” she said. “Often their parents don’t know anything about the college process, so it’s important that we talk to them about it by the time they’re juniors. Our college guidance counselor is great, but she’s only one person, so the teachers need to be having those conversations, too.”

The Summer Institute struck a sobering tone overall, underscoring that young people today are entering a tough economy in which “financial literacy” is both individual and communal.

“The takeaway for students should be that financial literacy is not about deprivation, but about planning and problem solving,” says Maureen Grolnick, Project Manager for both the Loot, Inc.org financial literacy program and Understanding Fiscal Responsibility curriculum. “It is not about changing their fortunes by skipping that latte, but about confronting the choices and opportunities they face individually with financially literate, often skeptical questions and by bringing that same savvy to the voting booth.”

Published Friday, Aug. 2, 2013


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