[Congressional Record Volume 151, Number 53 (Wednesday, April 27, 2005)]
[Senate]
[Pages S4420-S4421]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CORZINE (for himself, Mr. Akaka, Ms. Stabenow, Mr. 
        Lautenberg, and Mr. Baucus):
  S. 925. A bill to promote youth financial education; to the Committee 
on Health, Education, Labor, and Pensions.
  Mr. CORZINE. Mr. President, I rise today to introduce the Youth 
Financial Education Act. I am pleased to introduce this bill during the 
month of April--Financial Literacy Month.
  It is hard to underestimate the importance of financial literacy for 
our youth. As credit, banking, and financial systems in this country 
become more and more complex, it is time to make sure that our 
education system teaches our children the fundamental principles of 
earning, spending, saving and investing, so that they can be successful 
citizens. Federal Reserve Chairman Alan Greenspan said himself 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.'' It is crucial not only for the well-being of our 
children, but for the future of our society as a whole that all 
citizens understand how to manage a checking account, use a credit 
card, and estimate their taxes.
  According to the Jump$tart Coalition for Personal Financial 
Literacy's Survey of High School Seniors, which measures students' 
aptitude and ability to manage financial resources such as credit 
cards, insurance, retirement funds and savings accounts, only 52.3 
percent of students answered the survey questions correctly. In less 
than a year, 54 percent of these students who go onto college will 
carry a credit card. These statistics make it evident that we must do 
more to arm our youth with the tools they need to make informed 
decisions about the fiscal realities they will face upon entering 
college or the workforce.
  In 2004, only 7 states required students to complete a course that 
includes personal finance before graduating from high school. In my 
home State of New Jersey, New Egypt High School is the only school that 
requires a course financial education. Several years ago I had the 
pleasure of teaching a class of these students, and came away impressed 
with their knowledge and competency in financial matters.
  While awareness of the importance of financial literacy is improving, 
it is still not being addressed appropriately in schools. Our schools 
must prepare our children to succeed in every way, including in their 
financial decisions.
  I am pleased that I successfully added a provision to the No Child 
Left Behind Act giving elementary and secondary schools access to funds 
that will allow them to include financial education as part of their 
basic educational curriculum. Although this was an important step in 
the right direction, Congress can and should do more to address this 
Issue.
  The legislation I am introducing today will provide grants to States 
to help them develop and implement financial education programs in 
elementary and secondary schools. These programs will offer 
professional development for teachers and prepare them to provide 
financial education. It would also establish a national clearinghouse 
for instructional materials and information regarding model financial 
education programs.
  Earlier this year, the Senate debated the Bankruptcy Reform Bill that 
seeks to change the rules governing bankruptcy. While I agree that 
bankruptcy reform should provide an incentive for capable individuals 
to honor their financial obligations, this legislation will make it 
that much more difficult for people who have fallen into debt to 
declare bankruptcy. With these reforms imminent, it will be all the 
more critical to take a proactive approach to the problem of personal 
debt in this country and make sure that the next generation learns how 
to better manage their money.
  I ask for my colleagues to join me in support of the Youth Financial 
Education Act, which will equip our nation's youth with skills to 
become responsible consumers and enjoy economic security as well as 
economic opportunity in their futures.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 925

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. PROMOTING YOUTH FINANCIAL LITERACY.

       Title IV of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 7101 et seq.) is amended by adding at the end 
     the following:

              ``PART D--PROMOTING YOUTH FINANCIAL LITERACY

     ``SEC. 4401. SHORT TITLE AND FINDINGS.

       ``(a) Short Title.--This part may be cited as the `Youth 
     Financial Education Act'.
       ``(b) Findings.--Congress finds the following:
       ``(1) In order to succeed in our dynamic American economy, 
     young people must obtain the skills, knowledge, and 
     experience necessary to manage their personal finances and 
     obtain general financial literacy. All young adults should 
     have the educational tools necessary to make informed 
     financial decisions.
       ``(2) Despite the critical importance of financial literacy 
     to young people, the average student who graduates from high 
     school lacks basic skills in the management of personal 
     financial affairs. A nationwide survey conducted in 2004 by 
     the Jump$tart Coalition for Personal Financial Literacy 
     examined the financial knowledge of 4,074 12th graders. On 
     average, survey respondents answered only 52 percent of the 
     questions correctly. This figure is up only slightly from the 
     50 percent average score in 2002.
       ``(3) An evaluation by the National Endowment for Financial 
     Education High School Financial Planning Program undertaken 
     jointly with the United States Department of Agriculture 
     Cooperative State Research, Education, and Extension Service 
     demonstrates that as little as 10 hours of classroom 
     instruction can impart substantial knowledge and affect 
     significant change in how teens handle their money.
       ``(4) State educational leaders have recognized the 
     importance of providing a basic financial education to 
     students in kindergarten through grade 12 by integrating 
     financial education into State educational standards, but by 
     2004, only 7 States required students to complete a course 
     that covered personal finance before graduating from high 
     school.
       ``(5) Teacher training and professional development are 
     critical to achieving youth financial literacy. Teachers 
     should be given the tools they need to educate our Nation's 
     youth on personal finance and economics.
       ``(6) Personal financial education helps prepare students 
     for the workforce and for financial independence by 
     developing their sense of individual responsibility, 
     improving their life skills, and providing them with a

[[Page S4421]]

     thorough understanding of consumer economics that will 
     benefit them for their entire lives.
       ``(7) Financial education integrates instruction in 
     valuable life skills with instruction in economics, including 
     income and taxes, money management, investment and spending, 
     and the importance of personal savings.
       ``(8) The consumers and investors of tomorrow are in our 
     schools today. The teaching of personal finance should be 
     encouraged at all levels of our Nation's educational system, 
     from kindergarten through grade 12.

     ``SEC. 4402. STATE GRANT PROGRAM.

       ``(a) Program Authorized.--The Secretary is authorized to 
     provide grants to State educational agencies to develop and 
     integrate youth financial education programs for students in 
     elementary schools and secondary schools.
       ``(b) State Plan.--
       ``(1) Approved state plan required.--To be eligible to 
     receive a grant under this section, a State educational 
     agency shall submit an application that includes a State 
     plan, described in paragraph (2), that is approved by the 
     Secretary.
       ``(2) State plan contents.--The State plan referred to in 
     paragraph (1) shall include--
       ``(A) a description of how the State educational agency 
     will use grant funds;
       ``(B) a description of how the programs supported by a 
     grant will be coordinated with other relevant Federal, State, 
     regional, and local programs; and
       ``(C) a description of how the State educational agency 
     will evaluate program performance.
       ``(c) Allocation of Funds.--
       ``(1) Allocation factors.--Except as otherwise provided in 
     paragraph (2), the Secretary shall allocate the amounts made 
     available to carry out this section pursuant to subsection 
     (a) to each State according to the relative populations in 
     all the States of students in kindergarten through grade 12, 
     as determined by the Secretary based on the most recent 
     satisfactory data.
       ``(2) Minimum allocation.--Subject to the availability of 
     appropriations and notwithstanding paragraph (1), a State 
     that has submitted a plan under subsection (b) that is 
     approved by the Secretary shall be allocated an amount that 
     is not less than $500,000 for a fiscal year.
       ``(3) Reallocation.--In any fiscal year an allocation under 
     this subsection--
       ``(A) for a State that has not submitted a plan under 
     subsection (b); or
       ``(B) for a State whose plan submitted under subsection (b) 
     has been disapproved by the Secretary;
     shall be reallocated to States with approved plans under this 
     section in accordance with paragraph (1).
       ``(d) Use of Grant Funds.--
       ``(1) Required uses.--A grant made to a State educational 
     agency under this part shall be used--
       ``(A) to provide funds to local educational agencies and 
     public schools to carry out financial education programs for 
     students in kindergarten through grade 12 based on the 
     concept of achieving financial literacy through the teaching 
     of personal financial management skills and the basic 
     principles involved with earning, spending, saving, and 
     investing;
       ``(B) to carry out professional development programs to 
     prepare teachers and administrators for financial education; 
     and
       ``(C) to monitor and evaluate programs supported under 
     subparagraphs (A) and (B).
       ``(2) Limitation on administrative costs.--A State 
     educational agency receiving a grant under subsection (a) may 
     use not more than 4 percent of the total amount of the grant 
     in each fiscal year for the administrative costs of carrying 
     out this section.
       ``(e) Report to the Secretary.--Each State educational 
     agency receiving a grant under this section shall transmit a 
     report to the Secretary with respect to each fiscal year for 
     which a grant is received. The report shall describe the 
     programs supported by the grant and the results of the State 
     educational agency's monitoring and evaluation of such 
     programs.

     ``SEC. 4403. CLEARINGHOUSE.

       ``(a) Authority.--Subject to the availability of 
     appropriations, the Secretary shall make a grant to, or 
     execute a contract with, an eligible entity with substantial 
     experience in the field of financial education, such as the 
     Jump$tart Coalition for Personal Financial Literacy, to 
     establish, operate, and maintain a national clearinghouse (in 
     this part referred to as the `Clearinghouse') for 
     instructional materials and information regarding model 
     financial education programs and best practices.
       ``(b) Eligible Entity.--In this section, the term `eligible 
     entity' means a national nonprofit organization with a proven 
     record of--
       ``(1) cataloging youth financial literacy materials; and
       ``(2) providing support services and materials to schools 
     and other organizations that work to promote youth financial 
     literacy.
       ``(c) Application.--An eligible entity desiring to 
     establish, operate, and maintain the Clearinghouse shall 
     submit an application to the Secretary at such time, in such 
     manner, and accompanied by such information, as the Secretary 
     may reasonably require.
       ``(d) Basis and Term.--The Secretary shall make the grant 
     or contract authorized under subsection (a) on a competitive, 
     merit basis for a term of 5 years.
       ``(e) Use of Funds.--The Clearinghouse shall use the funds 
     provided under a grant or contract made under subsection 
     (a)--
       ``(1) to maintain a repository of instructional materials 
     and related information regarding financial education 
     programs for elementary schools and secondary schools, 
     including kindergartens, for use by States, localities, and 
     the general public;
       ``(2) to disseminate to States, localities, and the general 
     public, through electronic and other means, instructional 
     materials and related information regarding financial 
     education programs for elementary schools and secondary 
     schools, including kindergartens; and
       ``(3) to the extent that resources allow, to provide 
     technical assistance to States, localities, and the general 
     public on the design, establishment, and implementation of 
     financial education programs for elementary schools and 
     secondary schools, including kindergartens.
       ``(f) Consultation.--The chief executive officer of the 
     eligible entity selected to establish and operate the 
     Clearinghouse shall consult with the Department of the 
     Treasury and the Securities Exchange Commission with respect 
     to its activities under subsection (e).
       ``(g) Submission to Clearinghouse.--Each Federal agency or 
     department that develops financial education programs and 
     instructional materials for such programs shall submit to the 
     Clearinghouse information on the programs and copies of the 
     materials.
       ``(h) Application of Copyright Laws.--In carrying out this 
     section the Clearinghouse shall comply with the provisions of 
     title 17 of the United States Code.

     ``SEC. 4404. EVALUATION AND REPORT.

       ``(a) Performance Measures.--The Secretary shall develop 
     measures to evaluate the performance of programs assisted 
     under sections 4402 and 4403.
       ``(b) Evaluation According to Performance Measures.--
     Applying the performance measures developed under subsection 
     (a), the Secretary shall evaluate programs assisted under 
     sections 4402 and 4403--
       ``(1) to judge their performance and effectiveness;
       ``(2) to identify which of the programs represent the best 
     practices of entities developing financial education programs 
     for students in kindergarten through grade 12; and
       ``(3) to identify which of the programs may be replicated 
     and used to provide technical assistance to States, 
     localities, and the general public.
       ``(c) Report.--For each fiscal year for which there are 
     appropriations under section 4407(a), the Secretary shall 
     transmit a report to Congress describing the status of the 
     implementation of this part. The report shall include the 
     results of the evaluation required under subsection (b) and a 
     description of the programs supported under section 4402.

     ``SEC. 4405. DEFINITIONS.

       ``In this part:
       ``(1) Financial education.--The term `financial education' 
     means educational activities and experiences, planned and 
     supervised by qualified teachers, that enable students to 
     understand basic economic and consumer principles, acquire 
     the skills and knowledge necessary to manage personal and 
     household finances, and develop a range of competencies that 
     will enable the students to become responsible consumers in 
     today's complex economy.
       ``(2) Qualified teacher.--The term `qualified teacher' 
     means a teacher who holds a valid teaching certification or 
     is considered to be qualified by the State educational agency 
     in the State in which the teacher works.

     ``SEC. 4406. PROHIBITION.

       ``Nothing in this part shall be construed to authorize an 
     officer or employee of the Federal Government to mandate, 
     direct, or control a State, local educational agency, or 
     school's specific instructional content, curriculum, or 
     program of instruction, as a condition of eligibility to 
     receive funds under this part.

     ``SEC. 4407. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) Authorization.--For the purposes of carrying out this 
     part, there are authorized to be appropriated $100,000,000 
     for each of the fiscal years 2006 through 2010.
       ``(b) Limitation on Funds for Clearinghouse.--The Secretary 
     may use not less than 2 percent and not more than 5 percent 
     of amounts appropriated under subsection (a) for each fiscal 
     year to carry out section 4403.
       ``(c) Limitation on Funds for Secretary Evaluation.--The 
     Secretary may use not more than $200,000 from the amounts 
     appropriated under subsection (a) for each fiscal year to 
     carry out subsections (a) and (b) of section 4404.
       ``(d) Limitation on Administrative Costs.--Except as 
     necessary to carry out subsections (a) and (b) of section 
     4404 using amounts described in subsection (c) of this 
     section, the Secretary shall not use any portion of the 
     amounts appropriated under subsection (a) for the costs of 
     administering this part.''.
                                 ______