Financial Literacy Below National Average Among Rhode Island’s High School Students

First Time Rhode Island Participation in National Results

April 10, 2006 - A nationwide survey conducted for the Jump$tart Coalition for Personal Financial Literacy reveals that high school students in Rhode Island answered less than half of the answers correctly on the personal finance survey.

On average, students in Rhode Island answered 48.8 percent of the questions correctly, which is lower than the national average.  This fell short of the national average, which is 52.4, up from the 52.3 percent in 2004, 50.2 percent in 2002 and 51.9 in 2000.  This year is the first time the anonymous survey was conducted among high school seniors in Rhode Island through the coordination of the Rhode Island Jump$tart Coalition.

The results were part of Jump$tart’s 2006 nationwide survey measuring high school seniors’ level of knowledge of personal finance basics, and comparing these to the results from similar surveys conducted in 2004, 2002, 2000 and 1997 by the coalition.  The researcher for all five studies was Lewis Mandell, Ph.D., professor of finance and managerial economics at the University of Buffalo School of Management.

By subject area, Rhode Island participants correctly answered:

Governor Donald L. Carcieri, who proclaimed April, 2006 “Financial Literacy Month in Rhode Island” at a ceremony organized by the RI Jump$tart Coalition earlier this week commented on the survey results, “This survey demonstrates the great need for adults to take an active role in the personal financial education of our youth. One of the best ways to do this is to set a strong example through prudent daily personal financial decisions. It’s also important to improve our students’ skills in math, which is why I have introduced comprehensive education reform initiatives to address this issue.”

Claudia M. Kerbel, President of the RI Jump$tart Coalition and Co-Director of the URI Center for Personal Financial Education, who has served as a financial educator for more than 20 years offers her perspective on the Rhode Island results, “While the Rhode Island numbers are indeed low, they reflect the overall poor performance of our nation’s youth in personal financial knowledge.  These survey results should inspire all of us to continue to promote financial literacy programs in schools and with youth community-based organizations.  Financial education, combined with motivational activities and positive modeling are the keys to reversing the disturbing trends that characterize our state’s and nation’s personal economic status.”

In his comments at the Jump$tart Coalition and Federal Reserve Board joint news conference, Chairman Bernanke advised, “Financially literate consumers make the financial marketplace work better, and they are better-informed citizens as well.  As a former educator and school board member, and as the parent of two young adults, I am personally convinced that improving education is vital to the future of our economy and that promoting financial literacy in particular must be a high priority.”

Jim Hedemark, Executive Director of the RI Jump$tart Coalition attended the national survey announcement in the Board Room of the Federal Reserve Board of Governors in Washington D.C. on April 5, 2006 offers, “We are grateful for the partnership of Chairman Bernanke, who continues the financial education leadership of former Chairman Greenspan.  The Federal Reserve Bank of Boston is a strong partner in many RI Jump$tart Coalition activities.”

Personal financial education in the United States has become an issue of such national importance that Congress created the Financial Literacy and Education Commission (Commission) lead by the U.S. Treasury and comprised of 20 federal agencies, through the Fair and Accurate Credit Transactions Act (2003), Title V.  The Commission released Taking Ownership of the Future: The National Strategy for Financial Literacy (Strategy) on April 4, 2006.  Deputy Assistant Secretary for Financial Education, U.S. Treasury Department, Dan Iannicola, Jr., who coordinated efforts that created the Strategy, has visited Rhode Island twice in the last year.  In a letter that prefaces the Strategy, Secretary of the Treasury, John W. Snow writes, “Our goal is to make people more aware of the importance of financial education and challenge organizations across the country to help Americans become more financially literate so they can take ownership of their efforts.  I invite you to join this effort.”

The Rhode Island Jump$tart Coalition (founded in 2004) is an coalition of dozens of Ocean State and New England region businesses, community organizations, educational institutions, government agencies and officers. The coalition¹s mission is “to increase the financial literacy of individuals in Rhode Island.”  The coalition¹s website is www.rijumpstart.org

In 2006, for the first time, Rhode Island high school seniors participated in the national Jump$tart Coalition personal financial literacy survey that measures teenagers¹ knowledge of personal financial literacy topics. Rhode Island high school seniors answered 48.8% of the questions correctly. The national average was 52.4%.  For more details on the national survey, please click here.

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