The movement to institute personal finance education in high school has officially captured another state.
On Tuesday, Governor Gavin Newsom signed Assembly Bill 2927 into law, ensuring that all high school students in California will receive education in personal finance.
This legislative milestone makes California the 26th state to mandate a standalone personal finance course for high school students. The bill passed through the Senate and Assembly with unanimous bipartisan support, receiving backing from prominent education and business organizations.
Under the new law, all public high school students in California will have access to a dedicated personal finance course by 2027. Completing a personal finance course will become a graduation requirement by 2031.
With the legislation in California, 64 percent of students nationwide will now attend schools that either require or will soon require a personal finance course.
"We need to help Californians prepare for their financial futures as early as possible,” Governor Newsom emphasized in a statement published Tuesday by Californians for Financial Education. “Saving for the future, making investments, and spending wisely are lifelong skills that young adults need to learn before they start their careers, not after.”
Assemblymember Kevin McCarty, the bill's author, highlighted the challenges young people face as they enter college and the working world without financial literacy.
"This is at a time when they're being hounded by credit card ads and student loan applications,” McCarty stressed. “Personal finance equips youth to make informed decisions about saving, investing, and managing debt, leading to better financial stability in adulthood.”
A report titled "Investing in Tomorrow: Lifetime Value of Financial Education in High School," recently published by Tyton Partners in collaboration with Next Gen Personal Finance, underscores the benefits of financial education.
The report estimates that from building their credit record to setting up their personal savings, creating a retirement fund, and other financial milestones, California students who apply their learnings from a high school personal finance course could see a lifetime benefit of $127,000.
It also suggests that personal finance education can positively influence a state’s economic development and shape the financial future of its residents.
Currently, California lags behind the national average in personal finance education. Only less than one percent of California high school students are required to take a personal finance course, compared to 53 percent nationwide.
“Our young people need and deserve a clear understanding of personal finance so that they can make educated financial choices and build stable, successful futures for themselves and their future families,” noted State Superintendent of Public Instruction Tony Thurmond.
“By adding personal finance to our high school graduation requirements, we acknowledge that managing household finances and building financial stability are essential life skills," he said.
In May, the national trend of mandating personal finance education for high school students gained ground in Oklahoma with House Bill 2158, with the financial education requirement set to take effect on July 1 next year.
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