Before the Senate Committee on Governmental Affairs Subcommittee on Financial Management, the Budget, and International Security
March 30, 2004
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Chairman Fitzgerald and Subcommittee Members, I am pleased to be here this afternoon to discuss the Department of Education's efforts to improve the financial and economic literacy of our Nation's students.
As Deputy Under Secretary for Innovation and Improvement in the Department of Education, I oversee the Office of Innovation and Improvement, which supports education innovation through an array of discretionary programs, broadly disseminates the lessons learned from these programs, and helps to make strategic investments in promising educational practices.
Our focus at the Department of Education is on educating every child in our schools, so that no child is left behind. Last year, Secretary Paige joined former Treasury Secretary O'Neill in announcing the Administration's initiatives to raise awareness about financial education, and he acknowledged that, in addition to learning skills in the core academic subjects, it is important for students to gain financial literacy.
Toward that end, the Department has taken several actions to promote economic education and financial literacy. In fiscal 2002, the Department made a grant to the Jump$tart Coalition, a group of 140 national organizations, to carry out a project aimed at improving students' knowledge about personal finance, so that they can make informed financial decisions. The grant from the Department supports Jump$tart activities, including an online clearinghouse that provides a central listing of personal finance books, lesson plans, videos, software, and other high-quality educational resources. In addition, Jump$tart has created a set of voluntary national standards in personal finance that identify what K-12 students should know and be able to do in personal finance. These standards can be aligned with local educational goals or used as a tool to help policy-makers create standards for personal finance.
In fiscal 2003, the Department made a grant to Operation Hope, Inc. to expand the number of schools that are using its "Banking on Our Future" program. "Banking on Our Future" is a year-round financial literacy program for youth, ages 8-18, taught in schools and community-based organizations that serve primarily low and moderate-income students. In response to increased demand for its program, Operation Hope has used grant funds to hire additional staff to recruit, coordinate and train the volunteers who will teach the program in additional schools and community-based organizations. This program is taught using four one-hour modules: Savings Accounts and Banking Basics, Checking Accounts, Credit, and Basic Investments. The project matches each lesson with the math standards of each grade level and integrates the modules into the mathematics curriculum in the classroom.
The Department also administers the Excellence in Economic Education program, which received funding for the first time this year. This program will consist of a competitive grant to a single national nonprofit educational organization to promote economic and financial literacy among students in kindergarten through grade 12.
Once the grantee is selected, that organization will be responsible for national activities such as: building relationships with economic education organizations; dissemination of effective economics teaching; research on effective economics teaching; and dissemination of materials to foster economic literacy. In addition, the grantee will award subgrants to State educational agencies, local educational agencies, and State or local economic, personal finance, or entrepreneurial education organizations for the following purposes: teacher training; economics curriculum development; evaluations of the impact of economics education on students; research on economics education; creation of school-based student activities to promote consumer, economic, and personal finance education; and dissemination of best practices. The Department's website for the program provides information about the program's purpose and the fiscal year 2004 competition for funds.
The program is among 38 programs for which the Administration is not proposing fiscal year 2005 funding. Elimination of funding for the program is consistent with Administration policy of terminating small categorical programs in order to fund higher priorities.
I also want to mention the options that school districts have to use funds from flexible formula grant programs for financial education and economic literacy. Activities to promote consumer, economic, and personal finance education are specified as an allowable use of funds for school districts receiving grants under the State Grants for Innovative Programs, the Department's broad formula program that supports State and local efforts in education reform and improvement. In addition, if a school district chooses to exercise the flexibility available through the No Child Left Behind Act, the district may transfer funds from several other eligible programs to its Innovative Programs formula allocation, to make funds available for this purpose, without having to go through a separate grant application process.
In the postsecondary arena, Departmental regulations require postsecondary institutions to provide loan counseling to Federal student loan borrowers. This includes both initial and exit counseling. During the exit counseling, borrowers are reminded of their obligations to repay their loans, informed of the repayment options available, and provided with information about effective debt-management strategies that facilitate repayment. Some institutions include more general credit counseling as part of these required activities.
From kindergarten through postsecondary education, the Department is committed to ensuring that all students in America's schools have the opportunity to succeed in school and beyond. Financial and economic education is one of the tools that can help achieve this goal. Toward that end, the Department of Education is pleased to be working as a member of President Bush's newly established Commission on Financial Literacy and Education, headed by Secretary Snow, to coordinate the financial education resources of the government and the private sector.
I would be happy to answer any questions the Members may have.