Upon adulthood, we are expected to saddle credit card debts and student loans, and sign leases and salary contracts. But schools mostly ignore all that.
A young person tries to make sense of mortgage rates. (Illustration by News Decoder)
This article was produced out of News Decoder’s school partnership program. Ahmar Kennedy is a student at The Tatnall School in the United States, a News Decoder partner institution. Learn more about how News Decoder can work with your school.
I asked a high school student whether they knew how a mortgage worked. They hesitated before answering, “No.” They also admitted that they did not know much about student loans. Even with all their doubts, they still rated their financial preparedness a 7 out of 10.
“I don’t really know a lot of stuff right now,” the student told me. “But I feel like that’s gonna change.”
A mortgage is one of the biggest financial commitments most people will ever make. It is a loan used to buy a home, usually repaid over 15-30 years with monthly payments that include interest.
In the United States, the median home price is often in the hundreds of thousands of dollars. That means that people take on long-term debt that can shape their financial future. If someone makes poor financial decisions and cannot keep up with payments, they risk losing their home.
That mix of confidence and uncertainty reflects a broader question facing schools today. Are students actually prepared to manage money after high school, and should financial literacy be required before graduation?
Knowledge not required
Access to financial education in the United States is inconsistent, according to a 2020 report by economist Carly Urban, who examined more than 7,600 public high schools and found that only a small percentage require a standalone personal finance class.
Many schools offer it as an elective, while some do not. The report also found that students who complete the required financial literacy course tend to have better financial outcomes later in life, for example, higher credit scores and lower default rates.
However, whether schools offer financial literacy often depends on resources and state policies. Schools with lower student-to-teacher ratios were more likely to require it, while schools with fewer resources were less likely to offer it.
The student I interviewed had never taken a financial literacy class and said they mostly learned about money from their parents. They said they wanted to take a financial literacy class this year, but it did not fit into their schedule.
“I honestly think it would be good if schools taught financial literacy,” the student said. “I feel like a lot of kids don’t really know a lot about finance.”
They also explained that they feel less confident about student loans and major purchases, such as renting an apartment or buying a home.
Preparing for a world run by money
As a student, I have taken AP Macroeconomics, which has given me experience with broader financial topics such as inflation, interest rates, economic growth and how government policy affects the economy. While the class helped me better understand how money and markets work at a broad level, it did not focus as much on personal finance, such as budgeting, mortgages or student loans. That difference showed me that understanding the economy is useful, but many students still need practical financial knowledge for everyday life.
Sasha Latina, an economics teacher at The Tatnall School, where I’m a student, believes financial literacy should be required. “Financial literacy should definitely be a mandated class,” Latina said.
Many students, he said, are expected to understand financial systems without ever being formally taught them. If they do not learn these skills at home, they often end up figuring them out on their own.
“If you don’t have people teaching you financial skills, you kind of have to learn them on the fly,” he said.
Budgeting time in the school day
Latina said that one of the most important skills students should learn before graduating, and as they transition into college and independent living, is budgeting.
“I wish I understood interest rates better when I was paying off student loans,” he said.
One of the biggest financial decisions students make is choosing a college. Latina described a student who was deciding between the University of Miami, which would cost around $90,000 per year, and the University of Delaware, which would cost close to nothing. The student wanted to attend law school after college.
Latina encouraged her to think about how much debt she would take on and how that would affect her future.
Supporters of required financial literacy classes argue that schools have a responsibility to prepare students for real-world responsibilities, especially as tuition and living costs continue to rise. Without structured teaching, financial knowledge may depend too much on family background.
Others argue that school schedules are already crowded, and financial skills should be taught at home or put into existing classes rather than becoming a separate requirement.
This debate is not limited to the United States. In 2023, the European Union introduced a financial competence framework aimed at helping young people develop skills in budgeting, saving and understanding loans, showing that this is a global issue. Around the world, young adults face rising education costs and housing prices.
Understanding budgeting and loans could play a major role in how comfortably students transition into adulthood. For now, many students are learning about money only when they have to. But when it comes to decisions like taking out loans or buying a home, not understanding the basics can have long-term consequences.
Questions to consider:
1. What is meant by financial literacy?
2. Why should schools teach young people about things like mortgage rates and budgeting?
3. When was the last time you had to make a personal decision about money?
Ahmar Kennedy is in his last year of high school at The Tatnall School in Wilmington, Delaware, and plans to attend the University of Delaware Honors College to study wealth management and financial planning.