HR 486
Young Americans Financial Literacy Act
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Bill overview
The Young Americans Financial Literacy Act authorizes the Consumer Financial Protection Bureau to provide grants to eligible organizations to establish centers of excellence focused on financial literacy education for young people and families aged 8 to 24. These centers would develop and implement research-based programs, offer professional development, and conduct ongoing research to improve financial literacy skills and address challenges like student loan debt and predatory lending. The program is set to expire after fiscal year 2029.
Key provisions
- Creates a grant program within the Consumer Financial Protection Bureau.
- Funds centers of excellence to develop and implement financial literacy education programs.
- Prioritizes applications that address specific needs of at-risk populations and incorporate evidence-based practices.
- Includes activities such as developing instructional materials, supporting professional development, and reducing student loan default rates.
- Requires ongoing research and evaluation of program effectiveness.
- Sets a funding limit of $55 million annually, with a minimum of $27.5 million.
- The program will terminate after FY2029.
- Grants must be accessible through traditional and digital methods, including social media.
Who is affected
- Young people (ages 8-24)
- Families
- Financial institutions
- Nonprofit organizations
- Educational institutions
Notable changes
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Primary sponsor
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119th CONGRESS — 1st Session
H. R. 486
IN THE HOUSE OF REPRESENTATIVES
A BILL
To establish a grant program in the Bureau of Consumer Financial Protection to fund the establishment of centers of excellence to support research, development and planning, implementation, and evaluation of effective programs in financial literacy education for young people and families ages 8 through 24 years old, and for other purposes.
This Act may be cited as the Young Americans Financial Literacy Act
.
The Congress finds as follows:
According to a 2020 survey, less than half of states require high school students to take a course on personal finance, and less than 17 percent of high schoolers were required to take a one semester personal finance course.
For the fourth year in a row, more than one third of surveyed consumers gave themselves a B
when grading their own level of basic financial literacy. Less than one-fifth of Americans gave themselves an A
. Most adults feel that their financial literacy skills are inadequate, yet they do not rely on anyone else to handle their finances; they feel it is important to know more but have received no financial education.
The sudden disruptions caused by the spread of COVID–19 are presenting economic challenges with growing consequences. While some factors affecting financial well-being are beyond individual control, financial literacy can help people better manage their finances through times of hardship.
It is necessary to respond immediately to the pressing needs of individuals faced with the loss of their financial stability; however increased attention must also be paid to financial literacy education reform and long-term solutions to prevent future personal financial disasters.
There is an urgent need to respond to the COVID–19 economic recovery with research-based financial literacy education programs to reach individuals at all ages and socioeconomic levels, particularly those facing unique and challenging financial situations, such as high school graduates entering the workforce, soon-to-be and recent college graduates, young families, and the unique needs of military personnel and their families.
High school and college students who are exposed to cumulative financial education show an increase in financial knowledge, which in turn drives increasingly responsible behavior as they become young adults.
The majority (52 percent) of young adults between the ages of 23–28 consider making better choices about managing money
, the single most important issue for individual Americans to act on today.
According to the Government Accountability Office, giving Americans the information they need to make effective financial decisions can be key to their well-being and to the country’s economic health. The current pandemic, in which 88 percent of Americans say is causing stress on their personal finances, underscores the need to improve individuals’ financial literacy and empower all Americans to make informed financial decisions. This is especially true for young people as they are earning their first paychecks, securing student aid, and establishing their financial independence. Therefore, focusing economic education and financial literacy efforts and best practices for young people between the ages of 8–24 is of the utmost importance.
by redesignating section 1037 as section 1038; and
by inserting after section 1036 the following:
Activities authorized to be funded by grants made under subsection (a) shall include the following:
Developing and implementing comprehensive research based financial literacy education programs for young people—
based on a set of core competencies and concepts established by the Director, including goal setting, planning, budgeting, managing money or transactions, tools and structures, behaviors, consequences, both long- and short-term savings, managing debt and earnings; and
which can be incorporated into educational settings through existing academic content areas, including materials that appropriately serve various segments of at-risk populations, particularly minority and disadvantaged individuals.
Designing instructional materials using evidence-based content for young families and conducting related outreach activities to address unique life situations and financial pitfalls, including bankruptcy, foreclosure, credit card misuse, and predatory lending.
Developing and supporting the delivery of professional development programs in financial literacy education to assure competence and accountability in the delivery system.
Improving access to, and dissemination of, financial literacy information for young people and families.
Reducing student loan default rates by developing programs to help individuals better understand how to manage educational debt through sustained educational programs for college students.
Conducting ongoing research and evaluation of financial literacy education programs to assure learning of defined skills and knowledge, and retention of learning.
Developing research-based assessment and accountability of the appropriate applications of learning over short- and long-terms to measure effectiveness of authorized activities.
The Director shall give a priority to applications that—
provide clear definitions of financial literacy
and financially literate
to clarify educational outcomes;
establish parameters for identifying the types of programs that most effectively reach young people and families in unique life situations and financial pitfalls, including bankruptcy, foreclosure, credit card misuse, and predatory lending;
include content that is appropriate to age and socioeconomic levels;
develop programs based on educational standards, definitions, and research;
include individual goals of financial independence and stability;
establish professional development and delivery systems using evidence-based practices;
incorporate sensitivities to specific cultural, linguistic, or demographic characteristics;
enhance opportunities for asset building, such as increasing savings for lower income households and investments into the stock, bond, and real estate markets;
include an evaluation component to ensure the work’s effectiveness in increasing financial literacy or consumer access to appropriate financial products or services, or that the provider has evidence of such effectiveness;
promise future replication or can be sustained beyond the program period; and
will make effectiveness data (if any) that is generated from the work available to others in the financial education community.
The Director shall establish application and evaluation standards and procedures, distribution criteria, and such other forms, standards, definitions, and procedures as the Director determines to be appropriate.
An eligible institution receiving a grant under this section shall—
The aggregate amount of grants made under this section during any fiscal year—
shall be at least $27,500,000; and
may not exceed $55,000,000.
No grants may be made under this section after the end of fiscal year 2029.
The Director shall issue an annual report to Congress containing—
a list of grant recipients under this section, including the amount of such grant; and
for each grant recipient, a description of the specific populations being served by such grant.
For purposes of this section the following definitions shall apply:
The term eligible institution means a partnership of two or more of the following:
An institution of higher education.
A nonprofit agency, organization, or association.
A financial institution.
The term institution of higher education has the meaning given such term in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001(a)).
The table of contents under section 1(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by striking the item relating to section 1037 and inserting the following: