High School Personal Finance Course Requirement Passed By Senate

A bill that would require Californian High Schoolers to take a financial literary course as a graduation requirement passed the Senate on Thursday, with Governor Gavin Newsom adding that he will sign the bill into law later this year.

Assembly Bill 2927, authored by Assemblyman Kevin McCarty (D-Sacramento) would add the completion of a separate, stand-alone one-semester course in personal finance, that is prohibited from being combined with any other course, to the graduation requirements commencing with pupils graduating in the 2030–31 school year, including for pupils enrolled in a charter school. The bill would authorize, commencing with pupils graduating in the 2030–31 school year, including for pupils enrolled in a charter school, a pupil who completes a separate, stand-alone one-semester course in personal finance, that is not combined with any other course, to elect to be exempt from the graduation requirement to complete a one-semester course in economics. AB 2927 would also require local educational agencies, including charter schools, to offer in all of its high schools a separate, stand-alone one-semester course in personal finance, that is not combined with any other course, commencing with the 2027–28 school year.

Before AB 2927, there had been multiple attempts by GOP legislators to try and pass a similar bill making personal finance a requirement. This includes last years SB 342, authored by Senator Kelly Seyarto (R-Murrieta), which failed to get past key Senate committees due to many Democrats shooting it down. However this year, the Democratic authored AB 2927 gained more traction, with many Republicans, who had been trying to pass a similar bill for so long, joining in support. Some, such as Senator Roger Niello (R-Fair Oaks), even came on as co-authors.

Assemblyman McCarty wrote AB 2927 due to the large number of Californian students heading into college or the workforce with little to no personal finance experience. In a statement earlier this year, McCarthy also pointed out that, according to a Tyton Partners report, the lifetime benefit for students taking a one-semester high school personal finance course is $127,000. The report also found that guaranteeing personal finance education in high school can positively impact the economic development of a state and positively impact the financial security of future generations.

“Financial literacy is a necessity for California students. Most go into college or the workforce without any knowledge of personal finance,” said Assemblyman McCarty in February. “This is a time where young people are bombarded with credit card offers which can lead to thousands of dollars in debt. Taking a finance class in high school can help students make smart money decisions that will benefit them throughout their adult life.”

AB 2927 quickly moves up

The bill itself saw little push back, with only a few Republicans and Democrats abstaining from voting during the Assembly vote in May, which it subsequently passed 72-0. With most Republicans and Democrats still in agreeance in the Senate, the bill passed there as well on Thursday, leaving only a signature by Governor Gavin Newsom the only hurdle between it becoming law. Amidst the numerous approvals on Thursday, Newsom himself said that he would be signing the bill into law later this year.

“We need to help Californians prepare for their financial futures as early as possible. Saving for the future, making investments, and spending wisely are lifelong skills that young adults need to learn before they start their careers, not after,” said Governor Newsom on Thursday.

Senator Mike McGuire (D-Healdsburg) added that “Financial literacy is a critical tool that pays dividends for a lifetime. There’s a wealth of data about the benefits of learning these valuable lessons in high school, from improving credit scores and reducing default rates to increasing the likelihood that our future generations will maintain three months of savings for emergencies and have at least one kind of retirement account.”

However, while praise has come from both sides of the aisle, many commentors noted on Thursday that the bill would not have been here today if it wasn’t for years of GOP efforts in the past to try and get a bill like it passed.

“It’s good news about AB 2927, but we have to remember that this was a Republican effort for so long,” explained Southern Californian pollster Rose Delgado to the Globe on Thursday. “An odd coincidence that, once a Democrat wrote a bill like it, everyone was suddenly interested, no? The GOP, at the very least, deserve a shout out for trying to get this passed before. If Newsom is decent, he’ll do that when he signs this into law later this year.”

Should AB 2927 be signed into law, California would become the 26th state in the country to have a personal finance class requirement for graduation.