MUSTANG — Mustang High School teacher Carrie Hixon recently asked her students “What if you used your bank debit card to buy lunch at Taco Bell and you didn't have enough money in your checking account. What do you think Taco Bell will do?”
“Make you wash dishes,” the class clown popped off.
A serious Hixon countered, “Until recently, Taco Bell and your bank each could charge you a fee of $25 to $35. Thankfully, a recent law requires establishments to deny the purchase and hand your card back to you, if you have insufficient funds.”
“If you have overdraft protection for your checking account, your bank instead might extend you a short-term loan or pull the purchase amount from a linked savings account, but it comes with a cost,” she said.
“Did you really want to pay that much for your meal at Taco Bell?” she said.
The what-if scenario is meant to cause students to think about their personal finances. Per state legislation passed in 2007, Oklahoma students, effective this May, now must demonstrate an understanding in banking, taxes, investing, loans, insurance, identity theft and eight other areas to graduate. Teachers are required to certify students’ working knowledge in each area.
Schools like Mustang, which offered a personal finances course before the mandate — or Kingston, which implemented the requirement soon after enactment, are on track. But countless others are scrambling to meet the additional curriculum requirement — parking many students in front of computers for quickie, do-it-yourself learning.
Said Amy Lee, executive director of the Oklahoma Council on Economic Education, which lobbied for and helped develop the curriculum, “Oklahoma has some of the strongest standards in the country. Where other states require four or five standards regarding earnings, savings and investing, Oklahoma has 14 standards including three that are state-specific: bankruptcy, the financial impact of gambling and charitable giving,” she said.
The problem is the openness in the law, Lee said. It includes no funding for school districts to hire dedicated financial literacy teachers, she said.
Moreover, districts are permitted to implement the requirements in the seventh through 12th grades and use curriculum provided by the state Education Department or whatever they choose, she said.
Consequently, many school districts statewide are squeezing the curriculum into government, history or other classes, Lee said. Some rural schools in northwestern Oklahoma are just now getting started with the help of the Cherokee Nation Foundation, she said.
Joe Griese, a certified physical education teacher in charge of study hall and in-school suspension at Ada Junior High, oversees computer-based semesterlong classes for freshmen at Ada Junior High, along with two history teachers.
“We're basically teaching them how to live on their own,” Griese said.
At Kingston High School, Vicki Droddy teaches freshmen a year-long class in life skills. Projects include drawing straws for students’ and their would-be spouses’ future incomes and paying Droddy — “the bank” — for locally advertised cars and homes. “We’re very lucky that we have a principal who thought the class was important, and implemented it early,” she said.
Meanwhile, Southeast High School is meeting the requirement in varied ways, said Ann Kennedy, senior sponsor and advanced placement government teacher.
The curriculum is embedded in senior government classes, but many students meet the requirements through family consumer science, or home economics, or concurrent financial literacy courses with Oklahoma City Community College, she said. Advanced-placement students use independently paced computer courses and email Kennedy for help when they need it, she said.
Statewide, 11 banks have paid for 87 schools, from Waynoka to Ada to Deer Creek to Norman, to use the software of Washington, D.C.-based EverFi Inc.
Company spokesman Brian Cooley said sponsors pay several thousands of dollars per school for the software which, through experiential learning, puts students on the floor of the stock market, at a bank’s teller window and elsewhere, he said. It takes students six to eight hours to complete the program, he said.
Bank of Oklahoma alone is sponsoring 29 schools in the metro area. “In the very near future, the students participating in the program will make major decisions regarding paying for higher education, establishing their own households and applying for credit, and those choices can have a lasting impact on their lives,” chief executive Marc Maun said.
Meanwhile, The Oklahoma Council on Economic Education frowns on computer-based learning as a sole teaching tool for financial literacy, Lee said, noting Oklahoma’s three state-specific standards aren’t included in the software program. “Our preference is for a teacher to interact with students to meet the integrity of the law,” she said.
Are you financially smarter than a high-schooler?
1. About how many years would it take for $1,000 to become $2,000 if $1,000 is deposited in a savings account with an interest rate of 7.2 percent?
2. Which type of insurance protects a person from loss from lawsuits?
c. Term life
3. Which of the following taxes is regressive?
a. Sales tax
b. Federal income tax
c. Oklahoma state income tax
d. A tax where the amount paid depends on income
4. In Oklahoma, MOST consumer protection laws are enforced by the
a. Oklahoma Bankers Association.
b. Oklahoma Department of Treasury.
c. State Office of Personal Finance.
d. State Attorney General’s Office.
5. Stocks and bonds are similar in that both
a. Have a guaranteed rate of return.
b. Provide ownership in a business.
c. Have relatively high levels of risk.
d. Are tied to the rate of inflation.
6. Liquidity is defined as
a. How easy it is to turn an item into cash without losing any money.
b. How easy it is to lose money when you invest in a risky business.
c. The ability of savings to earn interest.
d. The potential loss from rising prices.
7. Money market mutual funds
a. Are always federally insured from FDIC.
b. Are only available from banks or stock brokers and are primarily designed for high risk investors.
c. By design provide lower rates of return than savings accounts because the money is invested in very short-term investments with a low risk.
d. Are designed to provide higher rates of return than savings accounts as the money is invested in very short-term investments with a low risk.
8. Compound interest is calculated
a. On the principal plus any interest they have already paid you.
b. On the principal minus the amount you are paid annually.
c. On the principal but not on the interest earned.
d. Using a complex formula that prorates interest over the life of an investment.
AT A GLANCE
The 14 areas of instruction that all Oklahoma public school students must show proficiency in before graduating high school, this May and afterward, are:
•Earning an income
•State and federal taxes
•Banking and financial services
•Balancing a checkbook
•Savings and investment
•Planning for retirement
•Loans and borrowing money, including predatory lending and payday loans
•Interest, credit card debt, and online commerce
•Identity fraud and theft
•Rights and responsibilities of renting or buying a home
•The financial impact of gambling
By the numbers
Among Oklahoma households:
•10.9 percent lack banking accounts
•40 percent lack savings accounts
•62.6 percent have subprime credit
•43.8 percent have little or no savings to cover emergencies.
Oklahoma's bankruptcy rate is 3.1 percent per 1,000 people.