Bill 4199 https://malegislature.gov/Bills/193/H4199
Welcome and thank you for joining me of this review of Massachusetts financial literacy Bill 4199. entitled An Act Relative to Personal Financial Literacy. I always like to start off, those that have seen my other reviews understand that I’m highly critical of these mandates and these financial literacy bills, not because I’m a jerk, simply because I want the best interests of the students to be kept at the heart when they’re passing this legislation. So I always express I’m very grateful and appreciative to those that have led the charge to push through these mandates into schools, into the classrooms. But again, I want bills that will make a lasting difference in our youth. And again, Massachusetts bill is one that I likely will be more critical toward. I did review this. I don’t want to give away the ending, but there’s a lot of missing gaps in there and I’m going to point those out. I’ll also emphasize some very positive things I do see with this bill and give it an overall rating at the end. Again, when I review these bills, I’m looking at one big thing, right? Will the students benefit and can they apply this into their life so they can meet their short-term needs at very minimum? In addition, I look to make sure it meets at least the minimum education standards. Those are a few of the qualities I look for in financial literacy mandates and bills promoting those mandates. So let’s dive into it. And we’ll put a link for this bill in there. Again, this is bill 4199. I’m using the edition filed on October 5th, 2023, which is the latest at this time of the recording. And I’ll start off with the first four paragraphs, which I was actually excited about. They were talking about funding. Now, as most of you know that I’ve seen some of my other videos, most of the financial literacy mandates are what they call unfunded mandates, meaning politicians say, hey, you are mandated to teach personal finance in the classroom. And then the teachers say, great, we’re happy to do so. Where’s the money? They say, you don’t get any money. You have to teach it. So they’re telling them you need to teach it, but it’s unfunded. So they don’t get any money for the actual teaching of this. So no money for materials, curriculum, teacher training or anything of that nature. And again, when I read the first four paragraphs here, I was excited because they were talking about funding right from the bat. And they’re establishing a financial literacy trust fund. I continue to read, I was very encouraged, but sadly, this is also an unfunded mandate, meaning they’re talking about establishing a trust fund, but there’s no money set aside to be put into that trust fund. So again, that same situation can occur where it’s like teachers, you have to teach us, but we’re giving you absolutely no resources to do so effectively. So that takes us to, if you’re following along, that takes us to line item 41, right? So the first, again, three or four paragraphs were about the funding, but the big picture is there’s no money set aside for this mandate. Other talk about grades 9 through 12 to deliver a standalone personal finance course for one semester, which is wonderful. Standalone is great. That’s required of any core subject and important for personal finance. I don’t like that they’re allowing it between ages from grades 9 to 12, and I’ll tell you why. If I’m teaching a 9th grader this information, they’re not going to be able to apply that in the near term, whereas somebody that’s a senior in high school would be able to apply many of the topics that they’re talking about teaching in the near term. And any educator knows that’s been out there when you have significant learning loss after even a summer, but after a year or two years, there’s significant learning loss when students aren’t applying what they’ve learned. So I’d be much more excited about this bill if it had four years of mandates starting from freshman year or at least limiting it to junior or senior years, preferably their senior year, because they can apply what they’ve learned in the near term which enhances the learning and it provides more benefit as well. And you’re not worrying about that learning loss that is quite steep after that year of not getting that subject matter training again. So, again, that was a problem there. The next line item I’m looking at is line item 47, 48. And this is a big one for me. I’ll read this just so that you get some context. Personal finance literacy standards established shall promote an understanding of personal finances. Now, for those in the education world, you know that understanding is a clear directive. And let me show you here what that looks like because it is… there’s learning models, right? So there’s hierarchy of higher order thinking skill sets, a few models that a lot of educators use as Webb’s depth of knowledge, and also Bloom’s hierarchy of higher learning skill sets. Now, if you see at the bottom there, understanding, recall reproduction, remembering is at the lowest level. So somebody there, to give you an example, if I get somebody to an understanding level of credit, they would know that, hey, 700 is a good credit score. They’d know there’s a few credit bureaus that track some transactions in their repayment history, and that’s it, right? But if I get somebody to that top level, which is creation, evaluation, analysis, now I have a student that will know how to get a copy of their credit report, analyze that credit report to see if there’s any mistakes they could develop a plan to improve their credit they would set up a calendar to check their credit on a regular basis and address those near-term needs so there’s a huge difference so if I’m a teacher reading this bill and I see shall promote an understanding of personal finance I know that I just need to get my students to the very lowest level of learning, maybe to pass an exam, maybe to pass a test, but it’s not higher order thinking skill sets that truly offer benefits. Low levels of learning offer very little benefit to any student. And the beauty of personal finance is when we can get these students to those higher order thinking skill sets where they’re applying, where they’re creating plans, where they’re doing those things, it has real benefit. as opposed to understanding, which is a much lower benefit. It continues. So the directive is, you know, you need to teach these topics. So teaching, understanding of personal finance, including, but not limited to these topics. So a teacher must teach these topics, but they can teach more topics if needed. I’m going to go through these real quick. Line item 48, number one, earning, spending, local, state, and federal taxes, charitable giving, methods of payment, consumer protection, balancing ledgers, checkbooks, and budgeting. First, who uses checkbooks, right? And second, this is just a random list of topics. The key with giving education directives is outcome-based. So if I’m going to give a directive to an educator, I would say every student should leave having created a job resume, right? Every student should leave having evaluated other students’ interview techniques and practice their own interviews, right? Every student should have researched and analyzed job opportunities that they can apply for in the near term. You know, every student should graduate, have completed applications required to get jobs they can do in the near term, whether it be a waiter, waitress or something on that high school level job. Right. So those are clear directives instead of just a random list of topics with no clear outcomes. Next, long-term savings, roles of banks and financial institutions, interest, simple compounding, financial regulations, and planning for the future, right? A lot of topics. In fact, this whole section lists 40 different topics, about 40. I did the quick count. And when we look at a semester long course, that’s about 45 to 50 hours of actual instruction time, right? Just because you have some, it’s 60 hours if you look at, you know, just the total time, but 45 to 50 hours of actual instruction time. And they want people to, teachers to cover 40 different topics. You know, financial planning for the future alone could take up that entire semester. So a lot of topics to be covered. Next. Line item 52, using credit making investments, risk of various financial instruments, basic diversification of assets. Very complex topics, right? Which is great. I would love for every student to graduate with an understanding of an investment, a plan, you know, understanding of how they want to diversify their assets. But first, let’s make sure they can budget. First, let’s make sure they have some risk capital. First, let’s make sure they have their debt managed. Again, because they won’t be able to apply those topics, they’re going to forget most of what they learned in there because they’re not going to be able to apply them. And if we don’t help them gain the foundation knowledge, they can be put off investing for 10, 20, 30 years if they get into debt or have other issues that aren’t addressed here. Next, protection of insuring assets, preventing identity theft and avoiding online scams. Again, there I think there’s an opportunity protecting and insuring assets. Maybe if they just focus on rent, rental insurance and car insurance, which are the most used by young people, that can narrow down the topics a bit. Next, emerging technologies in the financial industry, a basic understanding of cryptocurrencies, online commerce, and computer stock trading. Why would we teach high school students that don’t have a budget, that don’t have risk capital to computer stock trade, which is a high risk endeavor. If you’re not highly competent and qualified, it doesn’t make sense. And I think this is actually very problematic and can cause some serious consequences for those uneducated investors that are just jumping into computer stock trading. I would love for every student to graduate with some knowledge there. But first, let’s lay down the foundation. Let’s make sure they understand the risk of these various things. And lastly, line out of fifty seven rights and responsibilities of renting or buying a home or making a large purchase. Again, they can narrow that down to renting a home. Right. If we don’t have that, we have a semester. Let’s focus in on what they need now. But if you go through those whole list of topics, did you see anything mentioned about student loan debt? Did you hear anything mentioned about credit card debt, right? Total across the U.S. as of today, that is about a $2.7 trillion problem affecting a lot of Americans, right? You have a $1.7 trillion with a T student loan debt problem. uh and you have a one trillion and growing credit card debt and there’s no mention of that so there’s some serious gaps in there and there’s a lot of topics that are being taught that are not necessary at that time and just this quick scan of that again there’s about 60 percent of topics that were just not relevant to a student’s time I’m always looking at what’s most important and urgent in somebody’s life and then focusing the coursework and the lesson plans around that. So we do have some major problems with the topics. And again, they’re forcing teachers to teach these topics, right? It’s not just, hey, here’s some topics you can teach. No, you need to get students to an understanding level across all these topics. And you can add more if you like, but I guarantee you they’re not going to have enough time to even get through those topics effectively. So some major problems with the topics. Again, when we’re looking at subject matter to teach, it should be important. And also it should be led by a highly qualified instructor, right? We’re telling teachers to teach these topics they may not have an understanding of. If I talk to teachers, I guarantee most would not know how to teach the majority of those topics. And here in line item 84, starting there, they’re talking about teacher training. And they say they shall provide professional development opportunities subject to sufficient resources in the trust fund. Again, it’s unfunded. And really the focus of any fund, class, curriculum, or anything you’re trying to implement should be on the teachers first. They’re the backbone of education. Study after study shows that teachers have the biggest impact on student achievement. That’s where the focus should be, especially early on. And they don’t have any clear outcomes or frameworks for teacher uh standards or achievement that they should have prior to teaching students which would be very very problematic you get somebody that doesn’t know how to online stock trade right telling kids to to open up a robin hood account or whatever and start doing that that could be very problematic I see a lot of issues there so Let’s look at the next piece that was also very concerning, which is, it’s kind of weird, right? This part’s weird. They say, students, and this is, again, for those following along, line item 92, the teacher shall provide at least one experiential personal finance learning opportunity. And that’s just very strange to me, simply because the majority of instructions should be centered around research-based education principles. This is such a low barometer to do in a class, so low it should not be included here. Any good quality teacher knows, hey, that has to be project based learning activities, actual activities that apply to their real world. And a lot of this should be experiential, hands on and actually doing that. And that’s the beauty of personal finance. It’s not some theoretical calculation or some science experiment. It is something that they can actually apply. So when teaching personal finance, The majority of the class should be experiential. And just putting that in there, it’s kind of strange. And they also add, you know, with this one thing that they choose to be experiential so they can get people to make logical arguments, support claims using valid evidence, and demonstrate understanding of important financial literacy topics. Again, using very low-level language on the outcomes they have. for students. And that is the entirety of the bill. Five pages, that’s the entire bill. And as you note, I see major problems across there. Again, I don’t want to be too hard on people, but it’s very obvious to me that there was no educators involved in that. Nobody that’s built any type of quality personal finance program. And there’s major issues there. I’m going to get into my grading step by step through there. And I want to provide we’re going to be sending this to the legislatures that are involved. Also, other policymakers to help encourage them to advance a quality bill that will make a real difference. Advancing a bill like this, I feel, would put students in a very bad position. Additionally, if parents hear, oh, they’re teaching my kids about money. they’re going to think, hey, they’re getting it at school when they’re absolutely not. They’ll graduate lacking the basic skills and knowledge to make near-term financial decisions. So let’s look at… grading system we have here and again we put this together we’ve been contacted by uh over a dozen I’m gonna say tend to be very conservative conservative state legislatures and over two uh house of representative members to back their bills we absolutely could not because they all failed yet we took the time to provide them guidance and just this outline of what it takes to meet even Minimum education standards. What I mean by that is the minimum standards required by other courses. So let’s start here. Delivered in a standalone program. Yes, good job. integrated into other core subjects they didn’t I think they missed a huge opportunity there so that’s a I’ll give them a it’s a three-point system that means fail that means okay that means good I’m gonna give them a yellow circle there because it’s okay it’s a standalone subject only one semester which isn’t good they mentioned nothing about integration into other subjects so a problem there Assign adequate time and rigor to the subject matter. Absolutely not. Too many topics, not enough rigor, not long enough. In addition, they mentioned understanding several times, which is the lowest level of learning. Big problem there. Conduct ongoing education to support long-term outcomes. No mention of that. And that’s an easy way to enhance the learning and really expand how we’re supporting students after the class ends. Relevant content that prepares students for near-term life events, absolutely not. About 60% of the topics are not relevant to them. The others are, I think, a little dangerous too, some of the ones I mentioned. Adopt proven curriculum that encourages higher order thinking skill sets and application. A big fail there. In fact, they said the exact opposite of that, and they proved it with listing so many topics as opposed to really focusing on a few topics where they can really help students. Maybe it’s budgeting when they move out on their own. Maybe it’s getting a job. They can narrow that down and have a greater impact on student achievement. Customized lesson plans based on student needs. And basically, for those that aren’t familiar with socioeconomic status, the lower socioeconomic status individuals, when you teach them personal finance, they have a great knowledge of personal finance topics. Budgeting, delay gratification, those skill sets, it’s great. But they have… little hope for the future this is I’ve seen this time and time again whereas students from a high socio-economic area they have great hope for the future they have a lot more knowledge of investments and so forth but they lack some basic skills so it’s very interesting and there needs to be some adoption of various materials to serve where people are at financially Educator and leadership courses led by highly qualified educators. Absolutely not. In fact, most of them won’t feel confident teaching the majority of those subjects. Programs developed and deployed by experienced leaders. Judging from the bill, it mentioned nothing of that. In fact, this would, if you had a quality financial education program director there, this bill would handcuff them in many ways. So fail there. Learner outcome focus. There’s no measures mentioned. Absolutely no measures, right? And there’s a lot of measures we can do for students. Pre and post tests are the very low level. Surveys on their confidence, behaviors, other factors that would prove actual outcomes like setting up systems, setting up processes. No mention of any measurements. That’s an absolute failure. Funding, don’t need to get into that. uh you know they didn’t mention anything about starting young in elementary which is key financial habits form between seven and nine years old a big miss there because you’re working with high school students that already have set financial behaviors and lastly another big fail with parental involvement with this again parents are key to helping to modify and mold positive financial behavior so of this 12-point scale they got Half of that. So if I was giving them a grade like a teacher, they would get an F. I would meet with their parents. I would sit down and counsel a student. How could you do so badly? Again, I don’t want to get on anybody’s case too hard, but there’s major problems with this bill. And I want to let people know, too, I’m not just sitting here saying, hey, there’s major problems. We have a clear framework and guide for legislatures looking to enact financial literacy legislation. It’s called the Policy and Framework for High School Financial Literacy Education. And it outlines best practices to mandating personal financial literacy. That checklist gave you a good preview of what we’re covering in that. So this checklist is really a 12 point outline of what we cover. Again, this is done to just do two core objectives, right? One, we want financial education to meet minimum education standards required by other coursework. I think that’s fair. Right. Other coursework has quality educators, good material funding, enough time and rigor. That’s just the basic level of coursework in financial literacy benefits. One hundred percent of students or much of the other subjects benefit a small fraction of fact. Less than 10% of students will ever get a job in the STEM field, and the majority of high school training is focused there. Second, it’s saying every student should graduate being able to make near-term financial decisions that will protect them. We’ve all been there. Many of us have. You get out of high school. You move out on your own. You make some simple mistakes. You mess up your credit. It costs you years. You get into debt, it costs you years. You get into student loan debt, it costs you years. Again, we can focus on helping them avoid those near-term mistakes so they’re able to grow and invest and do all those things that they’re covering in the material. But we need to build that good foundation first. So again, this policy and framework is here. I’m here to personally consult with legislators and other people. Again, we’ve been approached by so many people in leadership and politicians that want to advance bills that we could not back. But we’ve given them very clear guidance on ways to improve their bill and all have failed to enact even the most basic things. And I understand there’s political gains, all that stuff. But we need to act in the best interests of our youth. We have two thirds of this country struggling financially. And there’s a way we can help reduce that problem. And that’s by enacting quality financial literacy mandates across the United States.
