BILL ANALYSIS Ó
AB 2546
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CONCURRENCE IN SENATE AMENDMENTS
AB
2546 (Calderon)
As Amended August 11, 2016
Majority vote
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|ASSEMBLY: |65-8 |(May 19, 2016) |SENATE: |35-0 |(August 16, |
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Original Committee Reference: ED.
SUMMARY: Requires that, when the history-social science
curriculum framework is revised after January 1, 2017, the
Instructional Quality Commission (IQC) consider including
specified content on financial literacy.
The Senate amendments expand the required content from the
"costs of credit" to the "effects of credit."
FISCAL EFFECT: According to the Senate Appropriations
Committee, any costs related to this bill are not likely to be
incurred for a number of years. Some of the topics prescribed
in this bill are already included in the adopted history-social
science framework. The next curriculum framework revision is
not expected until 2024 which will likely be based on updated
content standards incorporating some additional of topics
included in this bill. General Fund costs for considering
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topics not already addressed are unknown, but are anticipated to
be minor.
COMMENTS:
Need for the bill. According to the author, "Financial
illiteracy negatively impacts young people entering the labor
market. Young adults aged 18 to 25 tend to have large amounts
of credit card and student loan debt upon entering the
workforce. Lacking a clear understanding of basic financial
concepts, 18-25 year-olds are more likely to rely on high-cost
methods of borrowing. Risky borrowing not only undermines
future homeownership but also the ability to control one's
financial future.
"Financial illiteracy also hinders adults and their hopes for
retirement. Without a base knowledge of financial tools, adults
are less likely to invest in retirement plans. According to the
Employment Benefit Research Institute, 46% of Americans have
less than $10,000 saved for retirement. Another survey found
that 15% had not saved a single cent. Low saving and retirement
participation rates could lead to a dramatic increase in the
number of people on welfare and drive up costs nationally.
"Research has shown that early introduction to financial
concepts and repetition of those lessons yields a deeper
understanding. As a result, students who had financial
education courses early and more often had higher rates of
savings and were less likely to rely on high-cost methods of
borrowing."
2016 History-Social Science Framework addresses financial
literacy. The state's new History-Social Science framework,
adopted by the State Board of Education in July, 2016, includes
financial literacy content in at least the following grades:
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Grade 1: Students acquire a beginning understanding of
economics, including how people exchange money for goods and
services, and how people make choices about how to spend
money, including budgeting.
Grade 2: Students learn basic economic concepts of human
wants, scarcity, and choice, and the importance of
specialization in work today. Students also develop an
understanding of their roles as consumers in a complex
economy.
Economics course: Students learn about personal budgeting,
banking, debt, credit cards, interest, student loan debt,
mortgage debt, saving, and investing. This content is
presented in relation to larger economic issues and concepts.
Financial literacy elective course outline: Students learn
about credit cards and other forms of consumer debt, savings
and budgeting, retirement planning, state and federal laws
related to personal finance (e.g., bankruptcy), financial
credit scores, credit card applications, bank account
applications, simple and compound interest calculations,
retirement calculations, and mortgage and interest rates.
Students also learn about the importance of managing credit
and debt, and about identity theft security.
Analysis Prepared by:
Tanya Lieberman / ED. / (916) 319-2087 FN:
0004177
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