California Legislature—2015–16 Regular Session

Assembly Concurrent Resolution No. 162

Introduced by Assembly Member Dababneh

March 30, 2016

Assembly Concurrent Resolution No. 162—Relative to Financial Aid and Literacy Month.

LEGISLATIVE COUNSEL’S DIGEST

ACR 162, as introduced, Dababneh. Financial Aid and Literacy Month.

This measure would declare the month of April 2016 as Financial Aid and Literacy Month, with the theme of “Prosperity Through Education,” to raise public awareness about the continuing need for increased financial literacy.

Fiscal committee: no.

WHEREAS, California law requires that financial education,
including budgeting, managing credit, student loans, consumer
debt, and identity theft security, is included in the next revision of
the social sciences, health, and mathematics curricula; and

WHEREAS, The State of California established the Bank on
California Program to raise awareness among unbanked consumers
about the benefits of account ownership and to spur Californians
to open accounts; and

WHEREAS, The Bank on California Program makes quality
money management education more easily available to low-income
Californians and raises statewide awareness of the unbanked
problem and potential solutions; and

WHEREAS, Less than 20 percent of teachers feel equipped to
teach personal finance and more than one in six pupils in the United
States do not reach the baseline level of proficiency in financial
literacy; and

WHEREAS, According to American Consumer Credit
Counseling, the United States ranks 14th on the global list of
financially literate countries, behind countries like the Czech
Republic and Singapore; and

WHEREAS, Nearly one in four adults admit that they do not
pay their bills on time; and

WHEREAS, According to a GOBankingRates.com survey, 62
percent of Americans have less than $1,000 in their savings
accounts; and

WHEREAS, According to Sallie Mae’s “How America Saves
for College 2015,” on average, parents saved $10,040 for college,
the lowest level in three years; and

WHEREAS, 79 percent of parents believe it is more difficult
for today’s parents to save and pay for college than it was for their
parents’ generation; and

WHEREAS, Families that do not save for college typically do
not save generally. Parents who are not saving for college have
had, on average, 65 percent less money saved for all purposes than
those who are saving for college; and

WHEREAS, The top reason cited for not saving for college is
that families do not have enough discretionary money to set aside
exclusively for a child’s college education. More than 80 percent
of parents cite this as a major or minor reason for not having started
to save for college; and

WHEREAS, Nearly 67 percent of non-college-saving parents
are not saving for college because they assume their children will
be able to use financial aid or scholarships to cover the cost of
paying for college; and

WHEREAS, According to the Junior Achievement 2015 Teens
& Personal Finance Survey, 48 percent of teenagers think that their
parents will help pay for college, but only 16 percent of parents
of teenagers report planning to pay for postsecondary education;
and

WHEREAS, Parents serve as teenagers’ biggest teachers when
it comes to money management skills. Eighty-four percent of
teenagers report looking to their parents for information on how
to manage money, but 34 percent of parents say their family’s
approach to financial matters is to not discuss money with their
children; and

WHEREAS, Parents who do talk to their children about money
are often leaving girls out of the conversation. Teenage girls are
more likely than teenage boys to say that their parents do not talk
to them enough about money management (40 percent to 24
percent) and paying for college (34 percent to 23 percent); and

WHEREAS, The number of teenagers who think that their
parents do not spend enough time talking to them about managing
money rose from 21 percent in 2014 to 32 percent in 2015; and

WHEREAS, According to the Council for Economic Education’s
2016 Survey of the States, student loan debt is more than $1.3
trillion, the second largest class of consumer debt after mortgages;
and

WHEREAS, The college graduating class of 2014 graduated
with an average of nearly $29,000 in student loan debt; and

WHEREAS, Undergraduate students typically can use
scholarships and grants to cover only about 31 percent of the total
average cost of one year of a college education; and

WHEREAS, 75 percent of credit card-carrying college students
did not know they would be hit with late payment fees; and

WHEREAS, 4 in 10 millennials say they are overwhelmed with
debt and more than one-half say they are living
paycheck-to-paycheck, leaving them no ability to save for the
future; and

WHEREAS, According to a study by PwC and the George
Washington Global Financial Literacy Excellence Center of
millennials ages 23 to 35, inclusive, millennials are the age group
with the lowest level of financial literacy. Only 24 percent
demonstrated basic financial literacy, and only 8 percent
demonstrated high financial literacy; and

WHEREAS, Millennials are “financially fragile” in the sense
that nearly 50 percent do not believe they could come up with
$2,000 if an unexpected need arose within the next month, nearly
30 percent are overdrawing on their checking accounts, and 53
percent carried over a credit card balance in the last 12 months;
and

WHEREAS, Only 36 percent of millennials have a retirement
account, 17 percent with an account took a loan in the past 12
months, and 14 percent took a hardship withdrawal in the past 12
months; and

WHEREAS, Many employers, government agencies, schools,
service groups, community organizations, libraries, financial
institutions, and nonprofit entities, including, but not limited to,
FDIC: Money Smart, the Consumer Financial Protection Bureau’s
Office of Financial Empowerment, the California Jump$tart
Coalition, the CalCPA Financial Literacy Committee, the New
America Foundation, SparkPoint Centers, America Saves, the
United Way Financial Literacy Program, Junior Achievement
Finance Park, and the Girl Scouts of America, have created
programs to help people improve their financial literacy skills; and

WHEREAS, Resolutions similar to this resolution have been
introduced and passed with strong bipartisan support to increase
awareness of the need for financial literacy for California citizens;
now, therefore, be it

Resolved by the Assembly of the State of California, the Senate
thereof concurring, That the Legislature hereby declares the month
of April 2016 as Financial Aid and Literacy Month, with the theme
of “Prosperity Through Education,” to raise public awareness about
the continuing need for increased financial literacy; and be it further

Resolved, That legislators, employers, government agencies,
schools, service groups, community organizations, libraries,
financial institutions, and other nonprofit entities should be
encouraged to provide all Californians with the opportunity to
obtain or improve their financial literacy skills; and be it further

Resolved, That the Chief Clerk of the Assembly transmit copies
of this resolution to the author for appropriate distribution.