WASHINGTON, D.C. - U.S. Senator Kay R. Hagan (D-NC) announced today the introduction of her first bill, the Financial Literacy for Students Act of 2009, which creates incentive grants for states to incorporate financial literacy into their curriculums for grades 6-12. As a state senator, Hagan introduced a bill mandating financial literacy for high school students in North Carolina.

"Recent economic turmoil across the country has made it clear to me that we need to do a better job of educating our kids when it comes to personal finance," Hagan said. "Our students need to enter the workforce with the skills to make sound financial decisions when applying for credit cards, securing student loans, taking out a mortgage or managing a budget. It is not rocket science, but we just don't teach it."

The legislation will be referred to the Health, Education, Labor and Pensions Committee on which Hagan sits. It mandates that at least 80 percent of the funding be devoted directly to teaching students. The remaining 20 percent may be used for curriculum and professional development.
The bill creates incentive grants for states to incorporate financial literacy into their curriculum. It will designate a sub-office of financial literacy education within the Department of Education's Office of Innovation and Improvement. This office will coordinate activities with the Federal Reserve's existing financial literacy programs to improve the quality of financial literacy education.
Currently, only three states require a minimum of one semester of financial literacy. North Carolina and 17 other states require that the topic be taught within another subject. In North Carolina, it is embedded within Civics and Economics, which is taught after the 9th grade.

Testing across the country consistently demonstrates that students lack a basic grasp of financial concepts. A recent Harvard Business School study found that only one-third of respondents were able to understand compound interest or how credit cards work. A 2008 survey of financial literacy among high school students showed that students answered an average of only 48.3 percent of the test questions correct.

"Financial literacy is an issue that has been important to me for a long time," Hagan said. "As a state legislator, I championed a bill to require that financial literacy be taught at the high school level. I am proud to build on this work by introducing a financial literacy bill as my first piece of legislation as a United States Senator. I will be working hard this year to make progress on this important issue."