[Congressional Record Volume 147, Number 57 (Tuesday, May 1, 2001)]
[Senate]
[Pages S4116-S4117]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CORZINE:
  S. 807. A bill to promote youth financial education; to the Committee 
on Health, Education, Labor, and Pensions.
  Mr. CORZINE, Mr. President, today I am introducing the Youth 
Financial Literacy Act to address an important issue in education: 
teaching students the basic principles of financial literacy.
  Unfortunately, when it comes to personal finances, young Americans do 
not have the skills they need. Too few understand the details of 
managing a checking account, for example, or using a credit card. It is 
time to make sure that our education system teaches our children all 
the skills they need, including the fundamental principles involved 
with earning, spending, saving and investing, so that they can manage 
their own money and succeed in our society.
  We have just finished tax season, and a recent survey by the non-
profit JumpStart Coalition reveals that the average high school student 
knows very little about how taxes will affect her take-home pay. The 
study also found that, on average, only 36 percent of surveyed high 
school students could correctly answer basic personal finance 
questions, and only 33 percent of students believed that financial 
issues strongly impacted their daily lives.
  Young people today face an exceedingly complex financial system that 
is laced with pitfalls. Credit card companies lure naive college 
students, encouraging them to spend liberally. Music companies offer 
extraordinary deals such as ``8 CDs for one penny!'' and then trap 
customers into purchasing unwanted music every month. Many of our 
children are simply unaware of the dangers of these kinds of offers.
  We also must make sure that the next generation is prepared to deal 
with the challenges they will find in the workplace. Rather than 
providing specific benefits, many companies are now encouraging 
employees to buy

[[Page S4117]]

their own health insurance coverage and arrange their own retirement 
plans. The onus is now on the worker, who will need to understand the 
ins and outs of benefits programs in order to best provide for 
themselves and their families.
  This Congress is seeking to change the rules governing bankruptcy. I 
agree with the proponents of that legislation about the importance of 
holding Americans accountable for their financial obligations, indeed, 
our economy depends on the willingness of people to pay their bills and 
act responsibly, but this legislation will mean that people who have 
been plunged into debt must negotiate a more complex system and face 
very serious consequences. It will be all the more critical that the 
next generation learns how to better manage their money to stay out of 
debt.
  It is time for our schools to take on the challenge of preparing our 
children to succeed in every way, including their financial decisions. 
Young people need to learn the skills that will help them stay out of 
debt, maintain a good credit record, and save money for the future.
  In New Jersey, I am happy to say that many have already started the 
ball rolling on financial literacy education. My state allows local 
schools the option of offering financial education in high school, and 
the New Jersey Coalition for Financial Education is working with the 
New Jersey Department of Education to develop and implement core 
curriculum standards. Some in the business community have decided to 
help out as well. In South Orange and Maplewood, the Allegiance 
Community Bank has partnered with the Saturn Corporation to provide 
financial education to local schoolchildren. We in Congress ought to 
recognize and support more effort like these.
  I am not alone in advocating the importance of financial literacy. 
Federal Reserve Chairman Alan Greenspan said recently that ``Improving 
basic financial education at the elementary and secondary school levels 
is essential to providing a foundation for financial literacy that can 
help prevent younger people from making poor financial decisions.'' In 
Wisconsin, Governor Scott McCallum has introduced a program to help 
high school teachers integrate financial literacy into their 
classrooms.
  Today, I hope to elevate the discussion of this issue by introducing 
the Youth Financial Education Act, which would provide grants to states 
to help them develop and implement financial education programs in 
elementary and secondary schools, including helping to prepare teachers 
to provide financial education. It would also establish a national 
clearinghouse for instructional materials and information regarding 
model financial education programs.
  We must not sit idly by while so many of our children lack financial 
literacy. So I ask for my colleagues to join me in support of the Youth 
Financial Literacy Act, to help ensure that our next generation is 
prepared to meet the challenges of the new economy.
                                 ______