Monthly Archives: July 2006

Declining College Enrollment #

I was chatting with a colleague when he ask why university enrollment was declining. My unresearched, off-the-cuff answer was, “The economy is doing well.”

After spending some quality time with my good friend Google, I can more confidently say I’m partly right. Here’s a list of likely reasons; we’re not being hit with just one, we’re getting hit with all of them.

  1. A dip in the age distribution. Dr. Pamela Perlich from the Bureau of Economic and Business Research, University of Utah projects the college-age population will remain flat for the next several years despite a growing state population. As she explains, children of baby boomers are exiting their college years. [1] (However, the grandchildren of boomers are just starting to enter elementary school, which will contribute to a teacher shortage over the next decade.)
  2. A good economy. Traditionally when the the job market is hot there is a dip in college enrollment. When unemployment is high enrollment goes back up. The Seattle area (where I went to high school) is seeing a big hit in their community college enrollment for this reason.
  3. Immigration. In her report, Dr. Perlich points out that more than 4 in 10 non-citizen immigrants 25 years and older have less than a high school education. [2] Immigrants account for much of the population growth in Utah. She concludes, “These declining rates are at least partly explained by the increased immigration to the state of persons who have very low education levels and whose children are much less likely to finish high school as compared to the native born.” [3] We need to do a better job of getting immigrants to college. (I should also add that when children of immigrants do go to college, they are less likely than their peers to enter teaching, preferring higher paying professions. This also contributes to our looming teacher shortage, and makes the pool of educators less diverse.)
  4. International participation is down. It’s harder to get a student visa than it used to be, and Americans are decreasingly well liked in the international scene. According to one news report, “most U.S. universities reported a two and a half percent decline in foreign enrollment last year. Some schools saw drops as big as 23 percent.”
  5. Rising tuition. It’s economics at the most basic level. As tuition increases, fewer will be able to take advantage of higher education. As an article in today’s Deseret News reports, tuition hikes at nine public colleges and universities in Utah are covering costs traditionally paid for by state tax dollars. The average college graduate in Utah has nearly $15,000 in student loans; the number will go up, and interest rates are on the rise.


  1. Long Term Demographic Trends Impacting Higher Education in Utah (pdf),” Pamela S. Perlich, Ph.D., Bureau of Economic and Business Research, University of Utah, May, 2006.
  2. Ibid., p. 6
  3. Ibid., p. 8

See Also:

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Paying Math Teachers More #

Grant Harkness recently questioned the concept of paying math and science teachers more than their peers in other subject areas. His criticism centers around the perceived prioritization of math and science over English in the curriculum.

His arguments misdiagnose the problem: it’s not that Math teachers are more important than English teachers. It’s that they’re scarcer.

Districts have a harder time recruiting and keeping math and science teachers. Utah’s hot job market for scientists and technologists puts these positions in high demand. Teachers are being offered jobs in the private sector with double or triple the salary. In addition to high demand, there is also a supply problem: college students in the sciences are shying away from education degrees for the same reason.

The legislature recognized the problem, and in 2001 authorized the Public Education Job Enhancement Program. (Utah Code 53A-1a-601) The program (PEJEP), provides for signing bonuses (“Opportunity Awards”) and tuition assistance for advanced training (“Advancement Awards”) on a competitive basis to “secondary teachers with expertise in mathematics, physics, chemistry, physical science, learning technology, or information technology,” and is contingent on a four-year commitment to teach in Utah public schools.

Technical fields aren’t the only ones experiencing shortages. Last year, the legislature added special education teachers to the list.

If you’re an educator interested in the PEJEP, contact your district office.

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Mortgaging Our Children Part II: Public Education #

I ended my last post asking, “Is public education the proper place for a solution?” It’s a bit of a loaded question. Certainly, public schools should teach what amount to basic life skills, right?

Here in Utah, the Legislature has mandated basic financial education for high school students (Utah Code 53A-13-108). It happened partly because bankruptcy filings in Utah were nearly double the national average. The prevalence of fraud is a problem too. The Salt Lake City metropolitan area was ranked 7th highest for fruad-related consumer complaints by the FTC in their 2006 report (pdf). Personal financial education is one of a small handful of areas where the intent is to shape societal behavior—in this case, lower bankruptcy rates—through public schools.

What Should Be Learned?

Our first goal should be to determine why we’re teaching financial literacy. Are we attempting to shift specific societal behaviors, like increasing the saving rate, reducing welfare filings, combatting identify theft, or decreasing reliance on Social Security? If so, we need to be specific so we can measure it.

This approach dooms us to be reactive, as the effects we wish to measure may only be visible 5, 10, or even 20 years (or longer!) following high school graduation. Teaching about pension plans is almost archaic; few corporations still offer them. In an era of debit cards, automatic payments, and internet bill-pay, learning how to write a check is becoming less of an essential skill. Identity theft is regularly in te media, but are “common sense” protections taught in our classrooms?

If our intended outcomes are broader and less measurable (e.g. “teach life skills,” “a more educated work force,” or “better citizens”), how do we decide whether instruction is effective? Certainly, if it has no lasting value it is time better spent in other arenas.

Reasonable people will agree on a core set of values that should be taught: saving, investing, retirement planning (start now!), insurance, basic economics (supply and demand) and capitalist theory (market forces, incentives), recognizing and avoiding fraud, identity theft, and predatory lenders, understanding the persuasive techniques used in advertising, and managing credit properly. As one researcher put it, “Financial education is what you had wished you learned in school.”

How Not to Teach Financial Literacy

Financial literacy is not something passively absorbed. Dr. Lewis Mandell, a prolific writer and speaker on financial education states his research repeatedly shows no significant correlation between potential financial exposure and financial know-how.

Students who pay for their own auto insurance tend to know as much about insurance as kids who don’t even drive. (Students are not likely to shop for their own insurance, but will likely be an add-on to their parent’s policies.) Students with securities accounts in their own names know just as much as those without. (Do parents go over the statements with their kids, and jointly make investment decisions?) Store debit cards, etc. provide little experience, and may be a negative as teens often aren’t the ones paying off the card, and experience only the spending. It seems then, that suggesting young people will learn by doing is inaccurate—they’re not doing. Some level of education is certainly in order.


A participant at a NEFE symposium echoed what educators know: course content needs to be relevant. [1] A high school student with college aspirations and no full-time job will benefit from examples of lifelong savings, mutual funds, and compound interest. The same student would reap little benefit from a discussion of 401(k)s, pension plans, and IRAs, as such topics won’t be personally relevant for several years.

The Role of Public Schools

Foundational skills in financial literacy should clearly be taught in public schools. But how deep should the instruction go? It may seem that I’m suggesting the lack of immediate relevance of in-depth topics should preclude them from secondary school curriculums. This is not the case! The more difficult or foreign a concept is, the less likely it is to be retained—but exposure transforms topics from alien to familiar. Discussing 401(k)s and IRAs in high school will make the topic less daunting when decision time comes.

In 2002, Alan Greenspan said:

A recent study by Freddie Mac finds that homebuyers who obtain structured home ownership education have reduced rates of loan delinquency. Similarly, an evaluation conducted by the National Endowment for Financial Education on its high-school-based programs found that participation in financial planning programs improved students’ knowledge, behavior, and confidence with respect to personal finance, with nearly half of participants beginning to save more as a result of the program.

These findings underscore the importance of beginning the learning process as early as possible. Indeed, in many respects, improving basic financial education at the elementary and secondary school level is essential to providing a foundation for financial literacy that can help prevent younger people from making poor financial decisions that can take years to overcome. In particular, it has been my experience that competency in mathematics—both in numerical manipulation and in understanding its conceptual foundations—enhances a person’s ability to handle the more ambiguous and qualitative relationships that dominate our day-to-day financial decision making.

Feb. 6, 2002, in testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs. See the hearing report, “The State of Financial Literacy and Education In America (pdf),” p. 19

A solid foundation in math is definitely important, but financial literacy is as much about language as it is about math. Like any field, it has its own jargon. One can’t have a good discussion about insurance without understanding deductibles or co-pays, or a lesson on investing without understanding stocks, mutual funds, bonds, CDs, and inflation. In order to experience the “Ah-ha!” moment where learning transitions to understanding, a foundation is essential.

Whether it’s in English, economics, consumer science, or math class, if it’s not tested, it won’t be taught. States may opt for an integrated financial curriculum or a stand-alone course; either way, specific standards need to be defined and measured.

More Questions

Should financial literacy courses be required or electives? And more importantly, is financial education in public schools the only piece to the puzzle?

References :

  1. Financial Literacy in America: Individual Choices, National Consequences,” a white paper by the National Endowment for Financial Education (NEFE)

See Also:

  • The Utah Foundation took a look at this issue and proposed an interesting theory as to why the bankruptcy rate is so high. Executive Summary (pdf); Full Report (pdf).
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Mortgaging Our Children #

I’ve been involved in a national group studying financial literacy education in public schools. The statistics demonstrating the consumerism and indebtedness of the American public are astounding. It’s no wonder our federal government isn’t fiscally responsible–a good number of our citizens aren’t either.

The Problem

Americans carry about $800 billion in consumer debt. [1] At the end of 2004, nearly half (46.2%) of all families carry credit card balances month-to-month, and that percentage is increasing. The average balance has risen 15.9% over three years to $5,100. (The median was $2,200, which indicates the mean is skewed high; some consumers are in well over their head.) [2]

We’re spending more than we make. The U.S. Bureau of Economic Analysis is reporting a negative personal savings rate. [3] A CNN/Money article from the tail end of 2005 offers some good commentary:

The Commerce Department calculates the savings rate by taking the difference between after-tax income and all expenditures, including housing, food and clothing.

June was only the second month the rate was at zero since the monthly figure started being calculated in 1959. The annual rate for 2004 was 1.8 percent; the last time the annual rate was lower was 1934. [Emphasis added.]

CNN/Money, “The zero-savings problem” by Chris Isidore, August 3, 2005
Referenced Tues, 18 July 2006, 15:42 (MDT)

We’ve seen large national companies go bankrupt. Our national debt is expanding, and government agencies bond to cover recurring costs. Our government isn’t setting a good example. Parents making poor credit choices are ill-equiped to teach their children solid financial skills.

As home prices increase, Americans are borrowing against the equity of their home for more purchases. The increased spending has stimulated the economy, but the negative consequences are looming.

It’s a problem that needs fixing. Is public education the proper place for a solution?


  1. Stephen Brobek, PhD, Executive Director, Consumer Federation of America
  2. Federal Reserve, “Recent Changes in U.S. Family Finances: Evidence from the 2001 and 2004 Survey of Consumer Finances” (pdf)
  3. See the BEA‘s full report (pdf), and explanation on how the saving rate can be negative.

See Also:

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