The Obama Administration has announced the latest in a series of attempts to improve the financial literacy of the nation with a National Financial Capability Challenge to run concurrent with the 2010-11 school year. The Challenge is a voluntary classroom program to help educators teach high school students about saving, budgeting, credit and other skills critical to financial capability.
This is the second year for the Challenge which last year attracted 76,000 students and 2,500 educators from all 50 states. The Administration is hoping to improve those numbers by 15 percent this year and has asked previous participants to become "ambassadors for financial education" and recruit additional teachers to participate.
Teachers enrolled in the Challenge will be able to download a Teacher Toolkit with ready-to-use lesson plans on important financial concepts. An online exam will be administered by each teacher to students during a month-long window in March and April. Top scorers nationally and in each school will receive award certificates.
"The recent financial crisis taught us an enduring lesson. Financial literacy is essential not only to the financial security of millions of American families, but also to the economic health of our nation as a whole," said Treasury Secretary Tim Geithner. "Ensuring that young people have the skills they need to make wise financial choices today and into adulthood will help us build a stronger foundation for our nation's economic future."
In a recent study conducted by the Federal Reserve of Atlanta, researchers found that financial literacy along with numerical ability and cognitive capacity had a high correlation with mortgage delinquency and foreclosure rates.
The Wall Street Reform and Consumer Protection Act which was enacted in July establishes an office within the new Consumer Financial Protection Bureau expressly for financial education that will provide consumers with opportunities to access financial counseling; information to assist with the evaluation of credit products and credit histories; savings, borrowing, and other services found at mainstream financial institutions; activities intended to reduce debt, and prepare for educational expenses and other major purchases; assistance in developing long-term savings strategies; and financial services during the preparation process to claim earned income tax credits and other federal benefits.
In April the Obama Administration launched a financial literacy education website, http://www.mymoney.gov which has already received 17 million hits and the Department of Education has doubled its investment in K-12 financial literacy programs. Earlier this month Treasury unveiled a pilot program to set up financial accounts with debit card access for individuals without bank accounts to receive and access tax returns made by direct deposit, cutting down their reliance high cost services such as check-cashing. There have also been attempts to educate consumers about financial products with interactive applications on FHA, FDIC, and other websites.
Educators wishing to sign up for the challenge can do so at: http://www.challenge.treas.gov/about.aspx.