A new state law makes Michigan the 14th state to require personal finance education as a prerequisite for high school graduation.
House Bill 5190, sponsored by state Rep. Diana Farrington, R-Utica, gained bipartisan support in the Legislature, passing 94-13 in the House and 35-2 in the Senate in recent weeks. Gov. Gretchen Whitmer signed the bill today.
A previous version that narrowly passed the House late last year on a party-line vote was amended to remove components that would have replaced a foreign language requirement with the financial literacy requirement.
Michigan follows Florida, Georgia, Rhode Island and Ohio in passing similar legislation in the past year.
“As a mom, I want every kid who graduates in Michigan to enter the world with a diverse set of skills and knowledge, and that must include financial literacy,” Whitmer said in a statement.
Farrington said in a recent statement that high school must “prepare students for adult life.”
“Personal finance should be part of that educational preparation,” she added. “A financial literacy class will familiarize students with key financial concepts, helping them understand how to handle their personal budgets.”
Meanwhile, young professionals in West Michigan sense a gap in their understanding of personal finance, making it a topic in high demand at Hello West Michigan’s annual Intern Connect conference. Intern Connect is a half-day professional development conference designed to teach area interns about West Michigan’s lifestyle and economic opportunities.
The conference’s panelists are often asked about personal finance matters by the young professionals in attendance, said Hello West Michigan Executive Director Rachel Gray. It’s also a topic that participants frequently mention in post-conference surveys, Gray added.
To meet the demand for information, the 9th annual Intern Connect conference this week featured a dedicated personal finance session led by Dondreá Brown, founder of 1428 Financial Wellness and Young Money Finance. The conference’s summer-long e-newsletter will also feature personal finance content.
The new law aims to introduce personal finance education to students before they try to launch careers. It will require all students to complete a half-credit course — to be developed by the Michigan Department of Education — in personal finance before achieving a high school diploma. Seven states already require such a course.
Michigan will begin requiring the personal finance course for students who start ninth grade in 2024. Meanwhile, local school boards will decide whether the course fulfills a half credit of the state’s four-credit mathematics requirements, two-credit language other than English requirement, or a one-credit visual, performing or applied arts requirement. The course would not fulfill the requirement of a half-credit in economics, which has been in effect since 2015.
In addition to Michigan, five other states’ requirements are set to take effect in the next two years.
According to Next Gen Finance’s 2022 State of Financial Education report, the percentage of U.S. high school students who graduated after taking a personal finance course increased from 16.4 percent in 2018 to 22.7 percent this year. The number is expected to grow to more than 35 percent in the next few years.
“A vast majority of people across our country know young people should learn financial skills in school, and a strong, bipartisan majority of legislators support preparing students for life on their own,” Farrington said.