(Washington, D.C.) – Today, U.S. Senators Patty Murray (D-WA), Thad Cochran (R-MS), and Representative Carolyn McCarthy (D-NY 4th) introduced legislation that will make the federal government a major supporter of providing financial literacy education to Americans of all ages in our schools and colleges. The Financial and Economic Literacy Improvement Act of 2009 will provide $250 million in grants annually to states to support teaching financial literacy in K-12 and 2-and 4-year colleges. The bill was introduced today in the Senate and a similar version will be introduced in the House of Representatives.
“We used to say the three ‘R’s’ of school are reading, writing, and arithmetic,” said Senator Murray. “Well, I think we need to add a fourth ‘R’ – resource management. This bill will ensure that the federal government steps up to the plate and becomes a real partner in helping Americans manage their finances and make good decisions about housing, employment, and education. If we are going to avoid many of the mistakes that led to this crisis, we need to focus on giving Americans the skills to understand the fine print and avoid mounting debt. In January, after President Obama took the oath of office he called for an era of personal responsibility. This bill helps Americans to usher in that era.”
"Financial literacy and responsibility should be instilled in our young people early in life so that they have the knowledge and tools they need to make sound financial decisions as adults,” said Senator Cochran. “In my home state, the Mississippi Council on Economic Education is doing a good job of providing a foundation of financial literacy for Mississippi’s youth. I hope the assistance provided through this legislation will allow programs like the Mississippi Council on Economic Education to thrive in other states.”
“Over the past few months, it has become apparent that the lack of education among consumers about financial systems and products is one of the key elements of our nation’s current economic crisis,” said Representative McCarthy. “In many cases, consumers were preyed on by financial institutions and sold into debts that they were not capable of fulfilling. At its root, this has been a defining factor of the current economic crisis.
“This bill seeks to better educate consumers and arm them with the knowledge that will help them navigate the rough waters of our economy. The bill will also teach students in school and college financial literacy, which will help them avoid financial pitfalls in the future. It is more important than ever that Americans become informed consumers in order to prevent our economy from weakening further. I would like to thank Senators Murray and Cochran for their hard work on this bill and I look forward to introducing similar legislation in the House.”
The Financial Literacy Improvement Act seeks to enhance the teaching of economic and personal finance principals across disciplines in K-12 education, and to make practical financial and economic courses more widely available to adults of any age through our higher education system, including 2- and 4-year colleges. This bill will better prepare today’s and tomorrow’s citizens for the numerous individual financial decisions needed to ensure prosperous, healthy, and productive communities.
To do this, the bill authorizes $250 million annually, over the next five years, to be given to states. The funding will be split into $125 million for K-12 education efforts and $125 million for adult financial literacy efforts at 2 and 4-year colleges. The bill also includes a user-friendly clearinghouse of resources, tools, and best practices for financial and economic literacy education.
Senator Murray is a senior member of the Health, Education, Labor and Pensions (HELP) committee that oversees education as well as a member of the Labor, Health and Human Services and Education (LHHS) Appropriations Committee that oversees Education funding. Senator Cochran is also a senior member of the LHHS committee as well as the ranking Republican member of the full Appropriations Committee. Representative McCarthy is a senior member of the House Committee on Education and Labor.