Nearly half of U.S. high school students say they do not know how to establish good credit, according to new research released today by EverFi, Inc., the education technology company that teaches, assesses, and certifies students in critical skills including financial literacy. April is Financial Literacy Month, and a survey of high school students between the ages of 13 and 18 revealed that the state of financial literacy among the nation’s youth is grim.
According to the survey, more than a quarter of students believe they will be unprepared to manage their finances upon high school graduation. In addition, students surveyed demonstrated that they do not understand basic financial facts and concepts. For example:
- On average, students surveyed believe that a good credit score is about 500 and over a third believe that a good credit score is 300 or less.
- 41 percent of students surveyed think they are entitled to receive all paid taxes back upon filing a federal income tax return, or that they do not have to pay federal income taxes at all.
Most interestingly, students want parents and educators to intervene. Sixty-three percent of students surveyed say their parents are responsible for educating them about money management. Meanwhile, the Networks Financial Institute reported that only 26 percent of parents feel prepared to educate their children. In addition, 83 percent of students believe that personal finance should be mandatory in schools. However, only four U.S. states require at least a semester-long course devoted to the topic, and less than half of states require personal finance education to be integrated into other subject matter.
The survey further illustrates that stress around personal and family finances extends beyond the home and impacts their lives as students. Forty-four percent of teens reported that stress about money at home affects their school performance, and this feeling increases as teens get older.
“Many high school students have little, if any, personal experience in managing their own finances, yet they are just moments away from entering adulthood, opening lines of credit and making financial decisions that will impact their individual futures and our entire global economy,” said Tom Davidson, chief executive officer of EverFi. “This cyclical nature of sending students into the ‘real world’ without sufficient financial education is leaving the next generation unprepared for the challenges they’ll face as adults. While parental and educator involvement is critical, we believe that third-party investment in financial education can significantly increase student success.”
EverFi partners with more than 500 financial institutions, corporations and non-profit organizations to bring its innovative learning platforms to K-12 schools at no cost. More than 4,700 K-12 schools are using the EverFi™ Financial Literacy digital learning platform, including 69 of the 100 top school districts such as Chicago, Houston, Miami-Dade and Los Angeles. In recognition of Financial Literacy Month, EverFi also collected data from more than 20,000 high school students using the platform and produced an insight report and infographic that reveal the attitudes, behaviors and knowledge of high school students surrounding financial literacy.
The survey was conducted by ORC International from March 21-25, 2013 and included a sample of 505 American high school students between the ages of 13 and 18. Because the sample is based on students who initially self-selected for participation, no estimates of sampling error can be calculated.