SC high school students could be required to take financial literacy courses

South Carolina high school students could be required to take financial literacy courses in lieu of economics if a bill in the state legislature becomes law.

The bill, S. 16, would require a one-half credit course that teaches students how to balance a budget, how to accept and pay loans, how to buy and use insurance and more. Schools would still be allowed to offer economics as an elective.

“I’m not saying economics is not a great course of study. (I’m) just saying it’s not as essential to our students as personal finance is,” said Sen. Greg Hembree, R- Horry, a bill sponsor and the chair of the Senate Education Committee.

“This is really basic stuff,” Hembree said.

The measure passed the education committee with a unanimous vote. It is now headed to the full Senate.

Since schools would need to train teachers and buy materials, the requirement to take a personal finance class would begin with students entering the 9th grade in the 2022-2023 school year.

Sen. Luke Rankin, who is also a bill sponsor, read a letter from a constituent who said her then-eight-year-old son had $60 worth of GameStop stock in 2019. Her son, now 10, asked her to sell the stock, which brought the single-income family $3,200, said Rankin, R-Horry.

The lessons of personal finance benefit everyone “of all colors, races, ethnicities, all walks of life,” Rankin said.

The idea of requiring students to have personal finance education is not new, and it’s something that has been catching on in recent years, according to an article from CNBC. While a bill similar to this has been in the S.C. Senate for the last five years, Hembree said, other S.C. lawmakers have been pushing for this for decades. Rep. Jerry Govan, D-Orangeburg, pitched a financial literacy requirement roughly 20 years ago, but it never gained enough traction to pass, said S.C. Sen. John Scott, D-Richland.

While some influential studies have cast doubt on the effectiveness of teaching high school students financial literacy, other studies have shown some financial literacy programs do work.

Improving financial literacy has implications for larger social issues such as education and poverty.

For example, those with a college degree are more than three times as likely to be financially literate as someone who didn’t graduate college, according to a 2014 study published in the Journal of Economic Literature.

The bill will cost the S.C. Department of Education $4.5 million of state general fund money to implement in fiscal year 2021-2022, according to the bill’s fiscal impact statement. The lion’s share of that money would go toward purchasing materials. The textbooks would be changed out every six years, according to the fiscal impact statement.

For many individual school districts, there would be no additional cost to change the requirements, according to schools surveyed by the S.C. Revenue and Fiscal Affairs Office. However, some schools expect to spend up to $252,250 in startup costs should the bill pass. Districts’ recurring costs vary greatly from $4,000 per year to $1.7 million, according to the fiscal impact statement.