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Georgia high schoolers may soon need financial literacy class to graduate

Advocates said it's important young people learn about personal finance in school, especially before they take on student loans.

ATLANTA — High School juniors and seniors in Georgia may soon be required to take a financial literacy course to graduate. 

Advocates said it's important young people learn about personal finance in school, especially before they take on student loans.

In Georgia, student loan debt is among the highest in the nation, averaging about $42,000.

"It was this kind of perfunctory five minute, 'you're not going to default, right?'" Grace Carlock recalled of the moment she signed on the dotted line as a new college student. "'Ok, here's a loan, just sign here.' Then there's the money."

But Carlock wishes she knew then what she knows now.

"I still owe $10,000 more than the amount that I actually borrowed for the tuition in the first place," she said. "It's hard to have a grasp of how compounding interest really works. When you're that age, you have so little experience with real money."

Carlock added that when she started her career after graduating, she was paying nearly $400 a month toward her loan. But only $15-20 was going toward the balance itself.

"It was all that interest," she explained. "Paying that every month and seeing the balance actually increase was really demoralizing."

With federal loans temporarily frozen because of the pandemic, Carlock has been able to make interest-free payments, and finally make a dent in the $55,000 balance she still owes.

"Some people are just drowning," she said. "This is just not sustainable and something's got to give."

While President Biden and federal lawmakers argue over loan forgiveness proposals, the state legislature passed a bill that would require high schoolers to take a personal finance class to graduate.

The Senate made a few changes to the language of the House bill, which now heads back to the House for final approval before heading to the governor's desk.

Ray Martinez, president and CoFounder of financial literacy education company EverFi, said it's a move that's long overdue.

"It's incredibly important that we better prepare young adults as they're thinking about their choices that they're making about their college career," he said. "Understanding how to save, how to budget, how to manage your finances is a lifelong skill that can really change the trajectory of your life."

During the 2020-2021 school year EverFi surveyed thousands of high school juniors and seniors nationwide, and found surprisingly low levels of financial understanding.

The survey found:

  • Only 27% reported being ready to estimate what their monthly payments might be after college
  • Only 28% said that they felt “prepared” or "very prepared" to establish a plan for how they will repay the student loans.
  • Only 40% of respondents said that they felt “prepared” or "very prepared" to figure out the full costs of the colleges they were interested in attending.
  • Less than half (46%) felt prepared to complete the Free Application for Federal Student Aid (FAFSA).
  • Of those students, 32% felt that they could read and understand loan offers and repayment information they received.
  • Less than half, (47%) of students understood how to read a paycheck and understand what determines net pay.

"I think a lot of us have learned by making mistakes, and we don't need to do that anymore," Martinez said. "The more we can talk about it openly, the better off we are as a society."

But for those already strapped into debt, it may feel like too little, too late.

"You can educate people about it but you have to give them another option to make a sound financial choice," Carlock said. "Something like capping the interest at some reasonable amount. Tuition is still really expensive. Frankly, we just need relief."

The White House has extended the student loan freeze through Aug. 31.

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