109th CONGRESS
2d Session
H. R. 5046
To promote youth financial education.
IN THE HOUSE OF REPRESENTATIVES
March 29, 2006
Ms. MILLENDER-MCDONALD introduced the following bill; which was referred
to the Committee on Education and the Workforce
A BILL
To promote youth financial education.
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
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.
`(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 $500,000 for a fiscal year.
`(3) REALLOCATION- In any fiscal year an allocation under this subsection--
`(A) for a State that has not submitted a plan under subsection (b);
or
`(B) for a State whose plan submitted under subsection (b) has been
disapproved by the Secretary;
shall be reallocated to States with approved plans under this section
in accordance with paragraph (1).
`(1) REQUIRED USES- A grant made to a State educational agency under this
part shall be used--
`(A) to provide funds to local educational agencies and public schools
to carry out financial education programs for students in kindergarten
through grade 12 based on the concept of achieving financial literacy
through the teaching of personal financial management skills and the
basic principles involved with earning, spending, saving, and investing;
`(B) to carry out professional development programs to prepare teachers
and administrators for financial education; and
`(C) to monitor and evaluate programs supported under subparagraphs
(A) and (B).
`(2) LIMITATION ON ADMINISTRATIVE COSTS- A State educational agency receiving
a grant under subsection (a) may use not more than 4 percent of the total
amount of the grant in each fiscal year for the administrative costs of
carrying out this section.
`(e) Report to the Secretary- Each State educational agency receiving a
grant under this section shall transmit a report to the Secretary with respect
to each fiscal year for which a grant is received. The report shall describe
the programs supported by the grant and the results of the State educational
agency's monitoring and evaluation of such programs.
`SEC. 4403. CLEARINGHOUSE.
`(a) Authority- Subject to the availability of appropriations, the Secretary
shall make a grant to, or execute a contract with, an eligible entity with
substantial experience in the field of financial education, such as the
Jump$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.
`(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
2007 through 2011.
`(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.'.
END
