Year in Review: Financial Literacy Legislation in 2020

Financial literacy has come a long way. A hundred years ago, the term didn’t exist. Today, financial education is the topic of fierce political debate and expanding legislation. 

According to the 2020 Survey of the States, 21 states now require high school students to take a course in personal finance — an increase of four since 2018. And 25 states require high school students to take a course in economics — an increase of three since 2018. 

And those numbers continue to grow.

So, what’s happened recently? Long story short: progress. Key pieces of legislation were introduced for consideration — and a number of bills have already passed. Here are the most important developments in financial literacy legislation in 2020.

No. 1: Arizona 

What is the legislation? 

Senate Bill 1292 requires the Arizona state treasurer to promote and raise awareness about financial literacy within the state.

Status

Passed

Key takeaways

• The legislation formally established the Arizona Treasurer’s Financial Literacy Fund. 
• The fund was established with money from the legislature, in addition to public and private funding. 
• Its purpose is to increase promotion efforts of financial literacy statewide.

No. 2: Florida 

What is the legislation? 

Senate Bill 646 allows certain intercollegiate athletes in Florida to earn compensation for the use of their names, images, and likenesses. The bill also mandates that academic institutions provide a financial literacy and life skills workshop for these athletes.

Status

Passed 

Key takeaways

• Postsecondary institutions must conduct a financial literacy and life skills workshop for certain intercollegiate athletes. 
• The workshop must be at least 5 hours and held at the beginning of an athlete’s first and third academic years. 
• The workshop must cover information about financial aid, debt management, and budgeting, in addition to time management and available academic resources. 
• Institutions cannot include marketing or advertising materials from financial products or services during the workshops.

No. 3: Hawaii 

What is the legislation? 

House Bill 2066 would create a down payment guarantee program for qualifying first-time homebuyers in Hawaii.

Status

Considered

Key takeaways

• To qualify, homebuyers must successfully complete a program provided by an approved financial education agency. 
• The legislature determined that a downpayment is a major hurdle for many first-time homebuyers in Hawaii. 
• This hurdle is even larger for homebuyers whose earnings are too high to qualify for government aid, but too low to be deemed a safe risk by financial institutions. 

No. 4: Idaho

What is the legislation?

SCR 128 would encourage Idaho high schools, colleges, and universities to offer personal finance classes for-credit — meaning they count toward graduation requirements.

Status

Considered

Key Takeaways

• The legislative ruling is based on recent findings showing that Americans between the ages of 18 - 29 owe over $1 trillion dollars in debt. 
• High levels of debt are associated with higher rates of anxiety, depression, and other mental health conditions that can severely hinder the achievement of milestones, such as marriage, parenthood, and homeownership.

No. 5: New Hampshire

What is the legislation?

House Bill 1501 would establish a commission to study financial literacy in New Hampshire. The commission will make recommendations for a multigeneration approach to financial education within the state. 

Status

Considered

Key Takeaways

• The purpose of the financial literacy commission is to create a resource available to state agencies, teachers, and the public.
• The study will include information about the best practices for financial education.

No. 6: New York

What is the legislation?

Senate Bill 2397 requires the study of consumer awareness and financial education in New York.

Status

Considered

Key Takeaways

• The study will be carried out by the New York state department of financial services and the state department of consumer protection division.
• The New York departments must make recommendations for the establishment of a consumer awareness and financial education program.

No. 7: South Carolina 

What is the legislation?

House Bill 3199 requires financial literacy instruction specifically about college costs in South Carolina. 

Status

Considered

Key Takeaways

• House Bill 3199 is an addendum to an earlier bill. 
• Instruction will include the cost of college, loan terms, monthly payment obligations, repayment options, and student loan debt. 
• The program will cover topics like: opening a bank account, balancing a checkbook, credit score, completing a loan application, and managing debt.

No. 8: National legislation

What is the legislation? 

The Student Empowerment and Financial Literacy Act would establish a Department of Education grant program to encourage K-12 schools across the nation to offer financial literacy programs. 

Status

Considered

Key takeaways

• The bill was introduced by Representative Mike Gallagher, a Republican from Wisconsin.
• The program would award three-year grants. 
• The application process would be competitive to prioritize educational institutions in underbanked and underserved areas. 
• The grant program could provide financial literacy resources to a greater number of in-need communities. 
• Participating schools would have the option to tailor their program via training and partnerships with financial institutions. 

Bottom line

Each year the movement for financial literacy gains steam, and 2020 brought notable progress.