Contact:

Lori Z. Bahnmüller
Michigan Jump$tart Coalition
734/420-1530, ext. 423

For immediate release

FROM BAD TO WORSE: FINANCIAL LITERACY DROPS FURTHER AMONG 12TH GRADERS
Michigan Jump$tart Coalition poised to increase awareness, provide necessary classroom resources

NORTHVILLE TOWNSHIP, Mich., April 25, 2002 — While survey results released this week show high school seniors know even less about credit cards, retirement funds, insurance and other personal finance basics than they did five years ago, more policymakers are sitting up and taking notice, said the Michigan Jump$tart Coalition for Personal Financial Literacy.

Gov. Engler earlier this month, signed into law an act that requires the state to develop a model financial education program.  Public Act 111, sponsored by state Rep. Mike Bishop, R-Rochester, further encourages every school district to blend financial education into their curriculum.  State officials meet later this month to consider implementation of the new act.

"It is essential for students to learn to manage credit card expenses and pay off college loans while still in high school," Bishop said. "Students need to learn important financial lessons that will greatly enhance their economic future."

Jump$tart’s nationwide survey measured 12th graders’ level of knowledge of personal finance basics and compared the results with those from similar surveys conducted by the coalition in 2000 and in 1997.  The researcher for all three studies was Lewis Mandell, Ph.D., professor of finance and managerial economics at the University at Buffalo School of Management.

On average, participants in the 2002 survey answered 50.2 percent of the questions correctly – a failing grade based upon the typical grade scale used by schools.  The average scores in the 2000 and 1997 surveys were 51.9 percent and 57.3 percent, respectively.

The national results are similar to those garnered by the Michigan Jump$tart Coalition last year.  Conducted by the National Institute for Consumer Education (NICE), the 2001 survey looked at 12th graders´ level of knowledge within four areas: income, money management, saving and investment, and spending. Students were asked questions on a wide range of topics and concepts such as taxes, retirement, insurance, credit use, inflation and budgeting.  On average, survey participants answered 49 percent of the questions.

“If there’s a bright side, it’s that the situation quantified by Jump$tart’s surveys has caught the attention of Congress, regulators and others,” said Lori Z. Bahnmüller, chairman of the Michigan Jump$tart Coalition.  

In February, the Senate Banking Committee held hearings on adult and youth financial literacy.  Federal Reserve Board Chairman Alan Greenspan, U.S. Treasury Secretary Paul O’Neill and U.S. Securities and Exchange Commission Chairman Harvey Pitt were among the witnesses.

Earlier this year, President Bush signed the “No Child Left Behind Act of 2001” which makes $385 million in funds available for local educational agencies to use for 27 categories of “innovative assistance programs.”  The eleventh category consists of  “activities to promote consumer, economic and personal finance education.”  

“Our hope is that the latest survey results will compel superintendents to place a high priority on funding innovative personal finance education programs when applying for the money,” Bahnmüller said.  To view the survey in its entirety, visit www.mijumpstartcoalition.org and click on “survey.”

First convened in 2000, the Michigan Jump$tart Coalition for Financial Literacy is a volunteer organization whose more than 30 partners include federal and state agencies, universities, associations and sponsors of education programs.  Like the national umbrella organization, the Michigan Jump$tart Coalition endeavors to increase the prominence of financial literacy of young adults, develop, disseminate, and encourage the use of standards for grades K-12 and promote the teaching of personal finance. Visit the Michigan Jump$tart Web site at mijumpstartcoalition.org.