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Dan Loney: Well, financial
literacy is receiving greater attention these days, as
educators look at new and
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innovative ways to improve the
knowledge, especially for younger individuals, as we move
forward. Pleasure to be joined
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here in studio by David Musto,
Professor of Finance here at the Wharton School, who is involved
in a lot of these areas right
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now, David, great to see
you again. Thanks for your time.
- Nice to be back. Let's start with just, I guess,
your general thoughts about
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where financial literacy stands
at the moment, kind of in our culture, what it's missing, where
we need to go moving forward.
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When you think about today's high
school students, which is what we're focusing on a lot, and we could
talk about that— they haven't had
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a lot of opportunities to make
financial decisions. And they haven't had to think, to some
extent, about things that you and
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I had to think about a lot when
we were kids, like inflation. Until recently, it didn't even
come up. And yet they have so
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many big financial decisions
ahead of them. Not just student loans that loom very soon in
their lives, but also
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responsibility for their own
retirement, election campaigns that hinge on financial issues
that are hard to understand. The
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demands on them to understand
finance are greater than ever, so maybe literacy might not be
lower than it was
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40, 50, 100 years ago.
But the demands to be adept are much higher than they
used to be.
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And it seems like, in many cases,
the resources to be able to provide that information are not
there as much as they probably
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should be. Hopefully, they will
increase in the years ahead, but still a ways to go.
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I've been involved in developing a
financial literacy course for high school students, and it has
been an education to see how
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little they've already seen, and
how little is already out there. So it's been a great opportunity
for us to go in and, and really
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be helpful and add some value to
their lives, at a key moment, too, when— when all these
decisions are just about to come
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up with their lives.
- So tell us about what the course
entails and— and at what— how
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you've been able to develop the
relationships with a lot of these schools in order to
provide this information.
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Okay, so the course that I'm
talking about is Essentials of Personal Finance. Penn calls it
Finance 2, and that's
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important. It's actually a Penn
class. These students are taking it. Five hundred students
are taking this
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class right now, at schools all
around the country. And they are
getting Penn course credit. They
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get a transcript from Penn
showing this course on it. It covers the whole range of
financial issues that are
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relevant in their lives right now.
Like if you are working at— checkout at a store, what's
coming out of your paycheck and
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why? What does that get you?
Where's that going? And then student loans, which are coming
up for a lot of these students
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right away. Well, how do those
work? And it also covers some topics that really are about
being an educated voter. So when
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people say the Social Security
Trust Fund is running out. Well, what is that? What exactly is
that? It's not a stack of
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dollars somewhere that's running
out. But it— but it does mean something, and it is running out
soon. So what does— what does that
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mean? And do different
candidates say different things about that? Well, what do you
like? What— what does that mean
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for you? A lot of low hanging
fruit there that we are going out there and providing. And the
kids not only get a chance to
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learn this material, they get
Penn course credit. And I should add that what's really made this
work for us is a partnership
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between my center, the Stevens
Center, our global youth program that that reaches out to high
school students, and a nonprofit
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in New York called the National
Education Equity Lab, which has a lot of that last mile outreach
to these Title One high schools
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around the country. So that
teamwork between the two centers here at Wharton and this New
York nonprofit is what's made
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this work. So we have students
1000s of miles away from each other, taking the same course
now.
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