Youngstown Daily Legal News

Bill sponsors hope education program will stem growth of student loan debt

KEITH ARNOLD
Special to the Legal News
Published: April 25, 2016

Any Ohioan paying the slightest attention to news coverage of the 2016 presidential campaigns has learned that the greatest threat to millennials and those who come of age subsequent to demographic set is student loan debt.

Whether or not the prognosticators have it right, a pair of state lawmakers have come up with the Informed Student Document Act — a measure believed to make serious inroads on the issue.

House Bill 383, introduced by Republican Reps. Christina Hagan of Alliance and Robert McColley of Napoleon, would require all Ohio high school students complete a half unit of economic and financial literacy in their social studies curriculum by the time they graduate.

Additionally, the legislation calls on the Chancellor of Higher Education to develop an informed student document for each state college or university to be incorporated by the state Board of Education into the standards and model curricula for financial literacy and entrepreneurship.

“Ohio has one of the worst student loan debt problems in the United States,” Hagan told peers seated on the House Education Committee, which recently concluded a third hearing on HB 383. “It is time that we change the dynamic and help our students to overcome this burden.”

The representative said reports of students saddled with excessive debt, burdening their purchasing power and financial solvency are troubling to her.

Nothing short of a cultural change is in order, she said.

“We believe in a future with minimal debt can only be achieved when students understand the weight of their financial decisions and can more readily evaluate high cost purchases, such as that of higher education,” Hagan continued.

During the most recent committee hearing, a former state Department of Education, with previous experience as an educator and administrator offered insight to the plan.

“HB 383 provides consistency to an otherwise inconsistent landscape,” said Tom Rutan, former associate director in the Office of Curriculum and Instruction and Grove City High School principal. “It stresses alignment with the approved standards and establishes a common course length taught by a properly prepared, fully licensed educator.

“Plus, as a graduation requirement, it mandates that every child take and pass the course to earn one-half a credit toward graduation.”

Rutan said this segment of the state population requires the financial wherewithal to handle financial challenges of adulthood.

“In the past, the responsibility for teaching young people personal finance often rested entirely with parents,” he noted. “Some parents handled those tasks very well. But at other times that proved inadequate at best.”

Rutan said the parents, themselves, sometimes could stand to have some instruction on the subject.

“Schools are better positioned to provide quality, consistent instruction,” he continued. “This should be the same instruction anywhere in the state regardless of ZIP code.

“A trained teacher, delivering content based on standards that yields a half credit toward graduation is a big step in the right direction toward a more financially competent younger generation.”

McColley outlined results of the Investor Education Foundation study, which examined student performance in Idaho, Georgia, and Texas — three states that have implemented mandates to teach financial literacy.

“This study found a substantial increase in the credit scores of students in Idaho, Georgia, and Texas, starting the second year after teaching financial literacy courses and increasing even more as time went on,” the legislator said. “Moreover, in a similar trend, the implementation of financial education mandates also decreased the chance of students in those three states being more than 90 days delinquent on any credit account.

“The instruction in economics and financial literacy provided for in this legislation will include reviewing information included in the informed student document ... and lessons in sound money management, credit, investments and instruction on how to calculate on loans, all of which is important information to have in order to be financially stable.”

Four fellow House members have signed onto the measure as cosponsors.

Further hearings of HB 383 had not been scheduled as of publication.

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