April is National Financial Literacy Month! There is not as much attention paid to this celebration compared to Black History Month (February) and Women’s History Month (March), but the focus on financial literacy is important, particularly for the Black community. A Tupac lyric, “trying to make a dollar out of 15 cents”, speaks to the need in our community for financial literacy.

Years ago, they used to teach home economics in schools. We learned how to budget, write a check and other basic financial skills. Today, America has simply forgotten to teach financial literacy. Yet, when it comes to problem solving, most Americans are solving financial problems much more frequently than biology or chemistry problems, although those subjects are also important. 

The Chaplain College’s Center for Financial Literacy, in Burlington, Vermont, highlights significant gaps among states in teaching financial literacy in schools in its 2023 National Report Card on High School Financial Literacy. Only a few states earned high grades for their financial education requirements.

Conversely, five states were given a grade of F for the Class of 2023: California, Connecticut, District of Columbia, Massachusetts, and South Dakota. According to Chaplain, these states have few requirements or none at all for personal finance education in high school. Students in these states are able to graduate without ever having the opportunity to take a course that includes financial literacy instruction.

We can do better. We must do better.

Financial literacy should be a core topic in schools. The complexities of personal financial management contribute directly to our quality of life. It is almost as important as reading and writing and an essential skill for young people to jump start their careers and participate in society.

The 2008 financial crisis was caused in part because lenders found borrowers who were willing to accept risky nonconventional loans with high interest rates, and in some cases balloon payments, that the borrowers simply could not afford. There have been many regulatory safeguards put in place to better protect borrowers in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act including the “ability-to-repay rule”. This rule requires lenders to substantiate that borrowers can afford their mortgage. 

However, avoiding default is not the only safeguard needed. Borrowers still need to advocate for themselves to ensure they receive the best mortgage terms possible. Better mortgage terms result in better opportunities to build wealth. Given higher interest rates on mortgages today, borrowers need to negotiate with lenders to access the best home loan programs and obtain the best terms for their home loan, whether its for refinancing or purchasing a new home.

Beyond home ownership, there are other decisions that require financial literacy including student loans. Recently, the Biden-Harris administration announced a new student debt relief program to cancel $7.4 billion in student loan debt for 277,000 borrowers. After the Supreme Court struck down their more ambitious plan to wipe out $400 billion in debt last year, the current administration has been chipping away at the student debt crisis by launching more targeted programs. To date, $153 billion has been forgiven for 4.3 million borrowers. 

Yet there remains a need for future student loan borrowers to make better financial decisions. With the cost of college escalating, families should be much more cautious about taking on student loan debt by exploring alternative colleges and universities that may be less expensive – such as HBCUs, community colleges and state colleges – while also applying for grants and scholarship programs. College and student loan decisions require financial literacy.

Let’s celebrate National Financial Literacy Month by advocating for financial literacy to be taught in schools, with a mandatory requirement in high school. Let’s also do what we can to promote financial literacy for youth, such as the 14th annual I Got Bank Financial Literacy Art and Essay Contest (www.oneunited.com/book), where 10 winners nationwide will receive a $1000 savings account from OneUnited Bank. We can transform young students and their families to make better financial decisions and place them on a path to build wealth for generations to come.