Encouraging Greater Public-Private Sector Collaboration to Promote Financial Literacy for Students and Young Adults.

Floor Speech

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Mr. FOSTER. Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, I rise in support of H. Res. 327, a bipartisan resolution we introduced in April in honor of Financial Literacy Month.

I would like to start by thanking my friend Congressman French Hill from Arkansas, who should truly be considered as an original cosponsor of this resolution for working on this legislation with me.

The aim of this resolution is simple but important. It encourages collaboration between the public and private sector to promote financial literacy for students. It emphasizes the importance of financial literacy for consumers of all ages, and it supports efforts of Federal agencies to expand financial education resources.

This year alone, approximately 15.1 million students will be in grades 9 through 12 and almost 20 million students will be enrolled in colleges and universities.

That is a lot of young people who will soon be entering a complex financial marketplace where they will have to quickly make important financial decisions. These include decisions about paying for college, credit cards, financing a car or a home purchase, preparing for unexpected emergencies, and saving for retirement.

However, without an understanding of basic financial concepts, these young people will not be well equipped to make these decisions.

At a time when student loan balances stand at $1.5 trillion and a majority of private workers have access to defined contribution plans and not traditional pension benefits, it is even more important for young people and workers to be financially literate.

Part of the problem is that too few schools incorporate financial education into their curriculum. According to the Council for Economic Education, only a third of States require high school students to take a course in personal finance. In those States, most schools teach the subject as one portion of another course of study--such as math, economics, or social studies--while only five States require a semester-long, standalone personal finance course.

Studies show that financial illiteracy carries significant cost. Consumers who fail to understand the concept of compound interest spend more on transaction fees, run up bigger debts, and incur higher interest rates on loans.

We also need to work on making financial literacy tools available for everyone. Unfortunately, levels of financial literacy are lower among the less educated minorities and women.

Just 19 percent of high school graduates possess basic financial knowledge and skills. Perhaps even more troubling, according to a survey by the Consumer Federation of America and the Financial Planning Association, 21 percent of respondents, including 38 percent of those with income below $25,000, reported that winning the lottery was ``the most practical strategy for accumulating several hundred thousand dollars for their own retirement.''

This is a tragedy in the making, and we can do better.

While Americans are not expected to manage their own legal cases or medical conditions, they are expected to manage their own finances.

We teach our children to wear seat belts. We teach them to say no to drugs. We should also be teaching them the financial literacy skills that they will need to successfully navigate the financial marketplace.

We want to give young people and all consumers the tools they need to survive. One of the ways in which we can do that is by having Federal agencies partner with schools, local and State governments, workplaces, community organizations, nonprofits, and financial service providers.

Whether it is giving students immersive opportunities to see how money and banking work in the real world or helping train and equip teachers with the curriculum and materials they need to succeed in the classroom, Federal agencies should be bold and innovative in their approaches and leverage the ways in which technology can be used to further these laudable goals.

We cannot afford to have future generations of Americans grow up without learning these fundamental skills. For that reason, I urge all my colleagues to support this resolution.

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Mr. FOSTER. Madam Speaker, I yield 5 minutes to the gentleman from Georgia (Mr. David Scott).

Mr. DAVID SCOTT of Georgia. Madam Speaker, I thank the gentleman for yielding me this time.

The first thing I want to say is thank you to Mr. Foster and thank you to Mr. Hill for providing sterling, bipartisan leadership on this, Madam Speaker, what I feel is one of the most pressing needs facing our Nation today, and that is to equip our young people with the financial education, the financial acumen of navigating what is becoming even a greater, more complex financial system.

Madam Speaker, let me just bring this glaring statistic to drive home this point to you, the Congress, and the American people.

According to the Council for Economic Education, just 17 States out of the 50 States of our great Nation require students to take even one course in personal finance. Just 22 States require high school students to take a course in just basic economics, and then that course is interloped into others and not even in and of itself.

Yet the financial decisions that our young people are asked to make are immense, carrying lifelong consequences to consider in the decision, first of all, of whether to go to college or not, how to go to college, how to pay for it, and how to pay for the increasing costly debt for this college education.

Consider the challenges that can come from balancing a starting or beginning wage against the student loan debt or saving for retirement. Or consider many of the basic kitchen table choices that families must make each and every day to put food on the table, to buy or not to buy an automobile, just the simple electricity bill. They would have to make definite choices.

Consider the advantages that are afforded to consumers who do have access to credit, how important that is. How do you acquire that access, and how do you maintain that access for credit?

We are, indeed, a financial consumer economy, but we are basically a credit-based economy, and our young people must gravitate and be able to grapple with this in a responsible way.

In our increasingly complex financial marketplace, the value of financial education has never been higher. Personal education is badly needed.

To reduce debt, we would look at the debt that so many of our young people start out with year after year even finishing college. How do you manage that? How do you make those choices?

Financial literacy is the key to financial security not just of the individual, because if we don't have financial security for the people of our Nation, we don't have financial security for the future of this great Nation. That is why this is one of the most important issues that this Congress faces today.

I am so proud to join with my Republican friend and my Democratic friend in showing the bipartisan way that we must go to solve this problem and make sure that this generation and every generation coming after them have the best financial education.

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Mr. FOSTER. Madam Speaker, I yield myself the balance of my time.

I would like to again thank my colleague, Congressman Hill, for his assistance in support of this resolution, and I urge my colleagues to join us in supporting this important resolution to show Congress' commitment to ensuring our Nation's students have the essential financial literacy skills they need to thrive and excel in today's economy.

Madam Speaker, I yield back the balance of my time.

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