I am proud to be sponsoring Senate Bill 170 to make a one-semester course in financial literacy a graduation requirement for New Mexico’s high school students.
Senate Bill 170 matters because New Mexico scores very poorly on measures of financial literacy. For example, WalletHub, the personal finance website, ranked New Mexico 47th for overall financial literacy in 2019, and Champlain College’s Center for Financial Literacy gives New Mexico a grade of “C” for the quality and accessibility of our high school financial literacy education.
Financial literacy courses teach students critically important life skills, like budgeting, saving, investing, credit scores, and the costs of borrowing. Our students need these tools to break out of generational cycles of poverty. When students become more financially literate, they often teach what they have learned to their parents, benefitting the whole family.
Yet research shows that access to financial literacy education is one more thing that is distributed inequitably: children from low-income families tend to have significantly less access to financial literacy education than children from higher-income families.
New Mexico is one of a shrinking number of states that do not require students to take a course in financial literacy before they graduate from high school. Twenty-one states have made financial literacy a high school graduation requirement, with 17 of them adding it in the last decade. States with financial literacy requirements include three of New Mexico’s neighbors: Texas, Utah, and Arizona.
In a recent report, the nonpartisan think tank Think New Mexico recommended that New Mexico follow the lead of these states and make financial literacy a graduation requirement for our students. I agree. Since 2008, financial literacy has been available as an elective course for high school students in New Mexico’s public schools. Yet, only about 11% of New Mexico’s high school students completed one of these classes during the 2019-2020 school year.
Making financial literacy a graduation requirement would not only give students the tools they need to better manage their finances, it could also help raise New Mexico’s low graduation rate.
One reason why students drop out is that they do not see the relevance of schoolwork to their lives. A benefit of financial literacy courses it that they are tailored to be highly relevant to students, with focuses on things like the cost of college and student loans, or budgeting and saving as they begin their first jobs. This will help keep students engaged and in school.
We can add a financial literacy requirement in a way that does not burden our already overstretched school districts. For example, we can phase in the requirement over several years, and we can connect teachers and principals with a variety of free professional development materials, lesson plans, and teaching modules from nonprofits like the Council for Economic Education, Next Gen Personal Finance and Jump$tart, as well as local nonprofits like Prosperity Works and credit unions that already bring financial literacy education into some of our schools.
Senate Bill 170 is supported by a wide array of groups, including Think New Mexico, the League of Women Voters New Mexico, AAUW-NM, the Credit Union Association of New Mexico, Independent Community Bankers Association of New Mexico, the Greater Albuquerque Chamber of Commerce, One Main Financial, and Michael Riordan, President and CEO of the Jennifer Riordan Foundation.
At a time when New Mexico families are facing severe financial distress, we need to both address immediate needs and also look to the future by giving our students the tools avoid predatory lenders and make the best financial decisions for their families.
If you agree that we should make a class in financial management a graduation requirement, please visit the Action
Center on Think New Mexico’s website (www.thinknewmexico.org) and send your legislators and the governor an email urgingthem to support Senate Bill 170.