Great Lakes Wire

WASHINGTON, DC – U.S. Senators Gary Peters (MI) reintroduced bipartisan legislation to boost youth financial literacy. The Program to Inspire Growth and Guarantee Youth Budgeting Advice and Necessary Knowledge (PIGGY BANK) Act, which he introduced with Senator Cynthia Lummis (R-WY), would provide high school students with resources to help them become self-sufficient in their personal finances by creating a youth financial matched savings pilot program that promotes financial literacy – especially in low-income and underbanked areas. The legislation seeks to help high school students gain financial literacy skills that they can carry on as adults.

“It’s important that young people in Michigan and across the U.S. have the resources they need to help them manage their personal finances,” said Senator Peters. “This bipartisan bill would provide students with the tools to plan for the future and cultivate long-term financial security and success.”

“Education is all about preparing students for life beyond the classroom, and many educators have a passion for teaching the skills required for managing personal finances and making financial decisions. We know that without financial literacy, even the brightest students will run into trouble as they begin careers and start families. That’s why National Education Association (NEA) members are proud to support Senator Peters’ important legislation, a very practical approach that offers students a great incentive to learn financial literacy skills,” said Paula J. Herbart, President of the Michigan Education Association.

“The Michigan Bankers Association has always been an outspoken proponent for financial literacy and strong skills in personal finance. We support efforts for students to gain knowledge and understanding to become proficient and excel in managing personal finances. Opportunities to use that knowledge in a practical sense with depository accounts to become successful consumers of financial services is imperative,” said T. Rann Paynter, President and CEO of the Michigan Bankers Association.

“Financial literacy is critically important to Michigan credit unions, and our institutions are working hard every day to educate Michiganders to make wise decisions with their hard-earned money. Sen. Peters’ bill will afford high school students in Michigan, and across the country, an opportunity to learn early on how to budget, save, understand credit and make well-informed choices regarding their money that will last a lifetime,” said Patty Corkery, President/CEO of the Michigan Credit Union League.

“Credit unions are focused on the financial well-being of all, and financial education is vital to make that happen in all communities. The Program to Inspire Growth and Guarantee Youth Budgeting Advice and Necessary Knowledge (PIGGY BANK) Act provides grants in low-income and underbanked areas, creating a significant financial impact by helping families establish savings habits,” said Jim Nussle, President and CEO of the Credit Union National Association. “Credit unions thank Senator Peters for introduction of this legislation, as it will encourage and empower high school students and their families who already face financial challenges to save and succeed.” 

“Creating savings pathways and financial security are key components to decreasing economic inequality and closing the racial wealth divide,” said Cherie Collins Sims, Prosperity Now’s Interim President and CEO. “We know from our decades of research and experience that matched savings programs can boost savings and build a family’s wealth-building path through opportunities for higher education and homeownership. With legislation like the PIGGY BANK Act, young people and their parents or caregivers can be set up for success through savings and financial security.”

The PIGGY BANK Act would establish a financial matched savings pilot program carried out by States and the Department of Education, the Department of Treasury’s Education Commission and the Division of Consumer and Community Affairs of the Federal Reserve. In addition to participating in a financial literacy class, high school students participating in the program would receive a $300 initial deposit and up to $25 per month of matching funds with the students’ savings. Parents or caregivers would also be encouraged to participate with their children in the match program and through financial literacy afterschool clubs and/or workshops. Funds may be withdrawn a year after high school graduation and acceptable withdrawals include postsecondary education, career technical education, homeownership, business ownership or medical hardship.

Michigan received a “C” rating from the American Public Education Foundation scorecard on financial literacy. According to the American Public Education Foundation, in 2021 57% of adults in the United States were financially illiterate. Ramsey Solutions found that 88 percent of American adults do not think high school prepared them to handle money in the real world, while adults who took a personal finance class are five times more likely to say they graduated high school fully prepared to handle their money. 

Peters’ effort is supported by the Michigan Education Association, the National Education Association, the Michigan Credit Union League, Prosperity Now, and the National School Boards Association.

Original source can be found here