39 states now mandate high school personal finance courses

Students at Hoover High School in Alabama are making investment decisions that go beyond saving for a new pair of shoes. In a seminar led by teacher Gerri Kimble, teenagers discuss allocating their part-time earnings. Junior Darshan Parmar reports holding index funds such as the S&P, QQQ, and VOO. He manages these positions himself. Other students in the room direct 70 percent of their income into Roth IRAs or contribute to 401(k) plans. Kimble expresses enthusiasm for the group's engagement with market movements.

This classroom is one of more than 1,500 high schools across the United States offering a new Advanced Placement Business with Personal Finance course for the first time this year. The College Board, the organization that develops AP exams and administers the SAT, created the curriculum. CEO David Coleman stated that students told the board in surveys they wanted to turn their ideas into jobs. He described business as the constant learning of adaptation.

Coleman argues that business belongs in the liberal arts, placing it alongside core studies like math and history. He says this mix of practical and theoretical pedagogy is highly useful today. The course is designed for students who prefer a practical curriculum over the more theoretical approach of the existing AP economics course. Students in these classes study management, finances, and external factors like political, economic, and legal environments that impact business operations.

The new AP course fits into a wider legislative shift. According to the Council for Economic Education, 39 states now require a personal finance class for high school graduation. That number is four higher than it was two years ago. Hoover High School, the largest high school in Alabama with a student body nearing 3,000, operates in an affluent Birmingham suburb. The school often resembles a college campus with wide green spaces. It also offers a separate four-year business academy with classes in accounting and entrepreneurship.

Students report that the AP business course is challenging and can boost their grade point averages because AP classes are often weighted higher than standard courses. Sophomore Damola Kukoyi says the class allows him to improve his GPA while studying a topic he loves. Senior Rachel Deschaine notes that general business knowledge helps students understand how people and companies interact financially. Her father owned a trucking company, and her brother is studying economics. She sees the lessons applied in family conversations.

A Federal Reserve paper from a few years ago found that families in states requiring financial education made better financial decisions. During the COVID-19 pandemic, these families were more likely to use stimulus checks to pay down credit card balances and refinance mortgages while interest rates were low. Jennifer Steele, a professor of education at American University, says youth are effective at using money responsibly when they receive proper education.

The College Board will continue to administer the exam for students enrolled in the new course. Students who pass the exam can earn college credit in a field previously considered outside the traditional canonical subjects of English, history, and chemistry. Hoover High School will continue to offer both the new AP course and its existing business academy program.

The trend toward mandatory financial literacy continues to expand in state legislatures. The specific curriculum of the new AP course includes lessons on management and the factors that can make or break a business. Students at Hoover High School are among the first in the country to complete this specific college-level preparation this academic year.