New Jersey Students to Learn Personal Financial Literacy
By Veronica P. Hallett, Esq.

Late last year, before leaving office, Governor Corzine signed into law A-1943/S-2211, which requires the state Department of Education to create a program in personal finance for high school seniors. The program will focus on issues such as budgeting, savings and investments, and credit card debt. Students would be required to pass a one-half year course in financial literacy in order to be eligible for graduation.

The program will be tested in six (6) pilot schools: two (2) in northern New Jersey, two (2) in central New Jersey, and two (2) in southern New Jersey. The districts will be chosen to represent a cross-section of school districts from urban, suburban, and rural areas across the state. The pilot program will run for three (3) years, after which the Commissioner of Education will report to the Governor and Legislature on the feasibility of implementing the program statewide. The Department of Education will issue a grant to each of the pilot districts to finance the costs associated with implementing the financial literacy course.

The Office of Legislative Services (OLS) believes that most of the chosen districts will ask a teacher already on staff to teach the course, resulting in minimal costs for the program. The OLS noted that the Core Curriculum Content Standards for Education and Consumer, Family, and Life Skills currently require that students be instructed regarding personal finance. Therefore, there are probably qualified teachers already on staff in most districts. If the school does need to hire additional staff, the cost of the program is estimated to be $377 per pupil in the first year, rising 3% annually thereafter.

The associated costs are relatively small compared with the benefit the program may provide to New Jersey public school students. In supporting the bill, Assemblyman Gary Schaer noted in testimony that, in 2001, more college-age students filed for bankruptcy than graduated college. Senate Majority Leader Stephen Sweeney, who cosponsored the bill and was recently sworn-in as Senate President, noted that financial mistakes made by young people can impact them throughout life. He believes “Education is our best weapon to combat the overspending which has contributed to our country’s ever-growing credit card debt.”

National statistics show that students are accumulating debt at an early age and making unwise financial decisions. In 2007, almost one-third of high school seniors and more than three-fourths of college freshmen nationally had already accumulated credit card debt. Over half of graduating college students report that they carry four or more credit cards by the time they leave school. These numbers are likely to get higher as undergrads look for new ways to fund their education during the current economic crisis.

Because the cost-of-living in New Jersey is high, it is especially important for the state’s public school students to learn financial responsibility. Senator Sweeney hopes the program will help students to avoid making bad decisions “they will only regret when they’re ready to settle down and start a family of their own.” The Department of Education is currently in the process of choosing the pilot districts for the three-year test run of the program.

Florio Perrucci Steinhardt & Fader, L.L.C. ("FPS&F") is recognized as one of the most influential law firms in New Jersey and has established itself as a new leader in Education Law. The FPS&F Education Law Team has successfully represented School Boards in Board of Education meetings, Collective Bargaining negotiations, and litigation matters, and has successfully handled Special Education, labor and employment, student rights, school construction, and Board Management and Board Business Matters. Our Education Law Team will provide you with the integrity and efficiency your School Board needs in these difficult economic times.

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