Scholarships advance financial literacy at high schools
(Iowa) High school seniors began registering this week for Iowa’s annual scholarship sweepstakes aimed at improving financial literacy.
Sponsored by the Iowa Student Loan program, scholarships of $2,000 will be awarded this spring to 30 students who score the highest on an assessment developed to gauge an understanding of economic principles, as well as the fundamentals of investment strategies.
The money awards will be sent directly to pay for college tuition. The high schools where the winners attend will also receive $250 intended to support economic curriculum.
The Iowa loan program, established in 1979 as a private nonprofit–although the board is appointed by the governor–provides students competing for the scholarship tutorials in advance of taking the test. Much of the focus is on the consequences of borrowing and student loan indebtedness.
“The financial knowledge that I learned from this program regarding borrowing for college is invaluable,” Ryan Bonthius, a winner last year, told the Valley News Today of Shenandoah, Iowa.
“This scholarship helped me minimize my college debt and to be financially responsible,” he said.
With the escalation of the cost of a university education, the student loan market is one of the fastest growing segments of the U.S. economy. Over the last decade, student debt has risen more than 150 percent—far higher than the 50 percent growth in auto loans or the relatively flat debt taken out by consumers on credit cards or home mortgages, according to Bloomberg Global Data.
Combined, federal student loans account for $1.4 trillion.
Analysts are becoming increasingly worried about the impact student debt is having on the overall economy and what it might mean for the future.
Alarm in state houses across the U.S. has also spurred new mandates on high schools to provide fiscal literacy courses. A number of states and local school boards have gone further by making financial literacy classes a graduation requirement.
In comparison to other developed counties, many teenagers in the U.S. continue to lack basic knowledge of economics and commerce.
In the most recent administration of the Program for International Student Assessment, also known as PISA, 22 percent of U.S. 15-year-olds failed to meet standards for understanding essential financial concepts, products and risks.
The 2017 results were unchanged from the first time the PISA included financial literacy as part of the assessment five years earlier.
The latest PISA results also found that only about one in 10 U.S. students achieved the highest proficiency level as a top performer, defined by the test architects “as students who can look ahead to solve financial problems or make the kinds of financial decisions that will be relevant to them in the future.”