A new graduation requirement could be on its way to Arizona public schools, though obstacles remain.

Senate Bill 1058, which would require a semester of personal finance, passed a hesitant Senate Education Committee on Wednesday by a 6-1 vote. Committee members expressed unanimous agreement that financial literacy skills are important, but a majority said they would not support the bill as written if it makes it to the full Senate floor.

Half of all states today require a stand-alone finance course for high school students, up from just six states in 2019, according to Sharon Lechter, a member of the state treasurer’s financial literacy task force. Arizona would become the 26th state.

How would adding a personal finance class work?

Arizona already requires schools to embed financial concepts within economics classes. Students must take one-half credit of economics under current social studies graduation requirements, meaning students receive some level of personal finance instruction. Other elements of finance are scattered throughout K-12 classes.

Critics say that isn’t enough. 

“These are have-to skills,” said Sen. Ken Bennett, R-Prescott, the committee’s chairperson. “We have to start figuring out how to help our K-12 students be ready for life, and this is one of the most important areas that I think we have generally … not been doing as much as we could and should.”

The bill would separate personal finance into a stand-alone course of at least one semester. Individual school districts or charter schools would set their own curriculum and determine how to implement a course according to state standards. Suggested topics outlined in the bill include investing, managing credit, paying for college, budgeting, retirement planning, financing homeownership and types of credit.

The introduced version of the bill would require students entering high school this fall to take a personal finance course in order to graduate in 2028. Students graduating before 2028 would not be impacted. 

The total number of credit hours required to graduate would not change. Personal finance would take up one-half credit of Arizona’s seven elective credits.

Committee members suggested looser language governing where schools can fit the requirement within their curriculum. Sen. Christine Marsh, D-Phoenix, the sole dissenting voter, suggested schools should have more flexibility by choosing whether it counts toward social studies, math or elective credits. She was concerned about taking away dedicated elective space, she said.

“In some cases, that is what keeps kids in school. Some kids, they need their honors choir class. They need their art class. They need their theater class,” Marsh said. “To take something like that away kind of randomly is a little bit disturbing.”

Marsh and Sen. Catherine Miranda, D-Phoenix, said they want a clear fiscal impact report on the costs of implementing the requirement before they vote “yes” on the Senate floor. It would cost money to establish curriculum standards and for educators to potentially increase their workloads.

Implementation would come with other time-consuming, logistical hurdles, committee members noted. The State Board of Education has not yet created standards for the subject, and schools have to figure out how to fit the course into already tight schedules, which could require significant restructuring.

Marsh also raised concerns about how the change might impact rural schools, which often have fewer staff members and classes to shuffle to accommodate change. 

Sen. J.D. Mesnard, R-Chandler, the bill’s sponsor, said he is also open to amending the timeline by pushing the implementation date beyond the class of 2028 so schools would have more time to plan. Otherwise, students could enter high school this fall with a required course that does not yet exist. 

Arizona can look to states that have already adopted finance requirements for best practices and curriculums, said Christian Sherrill, director of growth and advocacy for Next Gen Personal Finance.

What are the benefits of personal finance education?

Only 46% of Arizona students have access to at least one semester of personal finance as an elective, state Treasurer Kimberly Yee said during a Jan. 22 presentation to the Arizona State Board of Education. Just 1% of students are guaranteed to take a stand-alone finance class before graduation, she said, citing data from Next Gen Personal Finance, an advocacy group that seeks to bring a finance requirement to every state.

Meanwhile, 57% of Americans cannot afford a $1,000 emergency with their current savings, student loan debt surpassed $1.74 trillion in 2023 and Arizonans maintain an average credit card debt of more than $7,000, she said. 

“I believe there is a direct correlation between the fiscal health of a family inside their homes and the greater fiscal health of the state of Arizona,” Yee said.

Teachers who spoke in favor of the bill on Wednesday said their students went on to apply personal finance skills from their classrooms to real-life issues, from filing their own taxes to helping family members find alternatives to title loans.

“I feel like I’m giving kids a leg up in the world,” said Mesa Public Schools teacher Angela Maris. “Especially when their parents don’t have the skills either, you’re not just helping the kids, you’re helping their families and friends.”

What happens next to the personal finance requirement bill?

There are two potential pathways to changing graduation requirements, Mesnard said.

The Legislature can vote for changes, which would prompt the State Board of Education to adopt the requirement and craft standards for the subject.

Legislative action is preferable because that route is often quicker, Mesnard said. After the Senate Rules Committee determines if it is constitutional, the bill could be considered on the Senate floor.

Should the bill fail, the State Board of Education can also decide to change requirements.

When the financial literacy task force presented to the board last month, state board members expressed a mixture of support and an interest in more solid details.

Board member Jacqui Clay said she was “100% behind” the idea but feared there would be unintended consequences for the educators forced to implement a new requirement.

“I get the ‘why,’ but we need the ‘how’ for educators to feel good about this. We all agree,” Clay said, “but we need the plan, and then the plan needs to be presented to stakeholders.”

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