High school financial literacy course can reduce Illinois poverty
Research shows financial literacy boosts economic opportunity. The success of the University of Chicago’s FinEDge program shows it should be expanded.
Making informed financial decisions about budgeting, credit, debt, investing and saving is key to helping about 1.5 million Illinoisans, or nearly 12% of the state’s population, get out of poverty.
A pilot program developed by the University of Chicago is changing that and expanding outside of Illinois.
According to a 2021 survey of Illinois residents, 25% said they lost at least $1,000 that year because they “lacked knowledge about personal finances,” such as by making an expensive purchase without budgeting or taking on debt they could not pay off. The percentage of respondents saying they lost at least $10,000 was 7%. Among other measures, financial illiteracy contributes to Illinoisans’ high rates of consumer and household debt.
The University of Chicago’s FinEDge curriculum is a solution. This financial literacy pilot program is showing early success in teaching Chicago Public Schools students what they need to know to make intelligent financial decisions. Illinois educators and lawmakers should consider spreading the program.
The FinEDge program was piloted in 2020 by a group of CPS teachers. In its inaugural year, it was used by 100 teachers to teach financial literacy to about 5,000 CPS students. FinEDge now is used by over 11,000 Chicago-area high school students and operates as a framework for efforts to expand financial literacy education in 10 states.
The program was developed after UChicago’s Financial Education Initiative identified limitations to existing financial aid programs. Instead of a one-size-fits-all approach, FinEDge’s curriculum is broken into six modules that consider individual financial and social circumstances while covering broad financial literacy topics: saving and spending, borrowing, earning, investing, managing risk and financing education after high school. In the classroom, FinEDge students apply those tools to real-world scenarios.
These classroom modules are paired with role-playing simulations. For example Magnetar Capital Foundation, an early benefactor of FinEDge, hosts the Magnetar Team Challenge, through which program participants engage in a mock stock trading competition.
FinEDge is highly effective. One external evaluation found “high school students exhibit more productive financial attitudes, report better financial behaviors, and demonstrate increased financial literacy knowledge” after completing the FinEDge curriculum.
Significantly more students also said they could “consider the risks and benefits of investing,” “pay no or few fees to use my money” and “set money aside for savings” after the program. Overall, 94% of students “feel more confident making decisions that deal with money” after completing FinEdge.
Illinois lawmakers began addressing financial literacy in 2021, passing a bill stating “beginning with pupils entering the 9th grade in the 2021-2022 school year” one semester “may” include a financial literacy course. Illinois does not require a dedicated financial literacy course, but has a vague “consumer education” requirement that can be easily filled. Another bill to expand financial literacy died after the 2023-2024 legislative session.
To ensure Illinois students are equipped with the financial skills necessary to secure their futures, local and state lawmakers should consider expanding financial literacy education based on FinEDge’s model. By following the lead of states such as Utah and Minnesota, Illinois can give students skills to improve their financial standing, avoid high credit card debt and climb the socioeconomic ladder.