1.This Act may be cited as the
Young Adults Financial Literacy
Act
.
2.The Congress find as follows:
(1)Eighty percent of parents believe schools
are teaching money management and budgeting, while over 70 percent of teachers
are not teaching financial literacy.
(2)Most adults feel
that their financial literacy skills are inadequate, yet they do not rely on
anyone else to handle their finances; they feel it is important to know more
but have received no financial education.
(3)It is necessary to
respond immediately to the pressing needs of individuals faced with the loss of
their financial stability, however increased attention must also be paid to
financial literacy education reform and long-term solutions to prevent future
personal financial disasters.
(4)There is an urgent
need to respond to the economic crisis with research-based financial literacy
education programs to reach individuals at all ages and socioeconomic levels,
particularly those facing unique and challenging financial situations, such as
high school graduates entering the workforce, soon-to-be and recent college
graduates, young families, and the unique needs of military personnel and their
families.
(5)More than 70
percent of parents say they have spoken with their teens about credit and using
credit cards wisely, while less than 44 percent of the teenaged children of
those respondents say their parents have talked to them about credit
cards.
(6)Seventy-six
percent of parents surveyed said their high school student does not have a
budget.
(7)The average credit
card debt among graduate students who carry cards is $7,831 per student, an
increase of 59 percent over 1998's average debt of $4,925.
(8)Young adults
between 20 and 24 represent the fastest growing segment of bankruptcy filings;
in fact, more people filed for bankruptcy in 2004 than graduated from
college.
(9)Credit card debt
among young adults between the ages of 25 and 34 has increased 55 percent,
while credit card debt among the youngest adults, between 18 and 24, has
skyrocketed 104 percent since 1982.
(10)In April of 2009, the Comptroller General
testified to the Subcommittee on Oversight of Government Management, the
Federal Workforce, and the District of Columbia, of the Committee on Homeland
Security and Governmental Affairs of the Senate that In 2006, we
reported that the [Financial Literacy and Education] Commission’s National
Strategy for Financial Literacy was a useful first step in focusing attention
on financial literacy but largely was descriptive rather than strategic. …
However, to date the Commission has not incorporated the other elements we
recommended. … For the most part, these revisions have consisted of newly
developed calls to action and have not represented a fundamental
shift in approach that incorporates specific recommendations on roles, funding,
and activities.
.
3.Grant program to
fund the establishment of Centers of Excellence in Financial Literacy
Education
(a)The Secretary of the
Treasury, acting through the Assistant Secretary for Financial Institutions and
the Deputy Assistant Secretary for Financial Education and in consultation with
the Secretary of Education and the Financial Literacy and Education Commission
established under the Financial Literacy and Education Improvement Act, may
make competitive grants to and enter into contracts with eligible institutions
to establish centers of excellence to support research, development and
planning, implementation, and evaluation of effective programs in financial
literacy education for young adults and families ages 15–24 years old.
(b)Activities authorized to be funded by grants made
under subsection (a) shall include the following:
(1)Developing and implementing comprehensive
research based financial literacy education programs for young adults ages
15–24 which can be incorporated into educational settings through existing
academic content areas.
(2)Targeting programs
based on a set of educational expectations, pre- and post-education assessment
tools, effective training programs for educators, and materials that
appropriately serve various segments of young adult and family populations,
particularly minority and disadvantaged individuals.
(3)Aligning financial
literacy education programs to a set of core competencies and concepts,
including goal setting; planning; budgeting; managing money or transactions;
tools and structures; behaviors; consequences; saving, both long- and
short-term; managing debt and earning.
(4)Designing
instructional materials using evidence-based content for young families and
related outreach activities to address unique life situations and financial
pitfalls such as bankruptcy, foreclosure, credit card misuse, and predatory
lending.
(5)Developing and
supporting the delivery of professional development programs in financial
literacy education that are research-based, on-going and collaborative to
assure competence and accountability in the delivery system, including
recognition of achievement and competence within existing systems for educators
and instructors.
(6)Improving access
to financial literacy education programs for young adults and families by
collaborating with financial institutions to disseminate information and
awareness of the importance of financial literacy education.
(7)Reducing student loan default rates by
developing programs to help individuals better understand how to manage
educational debt through sustained educational programs for college students in
partnership with non-profit associations.
(8)Conducting
on-going research and evaluation to assure learning of defined skills and
knowledge, and retention of learning.
(9)Developing
research-based assessment and accountability of the appropriate applications of
learning over short and long terms.
(c)Priority for
certain applicationsThe
Secretary shall give a priority to applications that—
(1)provide clear
definitions of financial literacy and financially literate to clarify
educational outcomes;
(2)establish
parameters for identifying the types of programs that most effectively reach
young adults and families in unique life situations, specifically individuals
in ages 15–24 years old;
(3)include content
that is appropriate to age and socioeconomic levels;
(4)develop programs
based on educational standards, definitions, and research;
(5)include individual
goals of financial independence and stability; and
(6)establish
professional development and delivery systems using evidence-based
practices.
(d)Application and
evaluation standards and procedures, distribution criteriaThe Secretary shall, by regulation and
order, establish application and evaluation standards and procedures,
distribution criteria, and such other forms, standards, definitions, and
procedures as the Secretary determines to be appropriate.
(e)Minimum and
maximum amount of any grantNo grant under this section may be
for an amount less than $2,000,000 or more than $5,000,000.
(f)For
purposes of this Act the following definitions shall apply:
(1)The term
eligible institution means any partnership consisting of an
institution of higher education and any of the following which meets such
requirements for eligibility as the Secretary of the Treasury and the Secretary
of Education may jointly prescribe by regulation:
(A)One or more local
educational agencies.
(B)A nonprofit
agency, organization, or association.
(C)A community-based
organization.
(D)A financial
institution.
(2)Institution of
higher educationThe term
institution of higher education has the meaning given such term in
section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001(a)).
(3)The
term Secretary means the Secretary of the Treasury, unless the
context specifically refers to the Secretary of Education.
4.Authorization of
appropriationsThere is
authorized to be appropriated to the Secretary $55,000,000 for each of fiscal
years 2012 through 2016 for carrying out this Act.
5.In addition to regulations prescribed under
section 3(d), the Secretary may prescribe such regulations as may be necessary
to carry out this Act.