A bill to promote youth financial education.

Summary: Youth Financial Education Act - Amends the Elementary and Secondary Education Act of 1965 to authorize the Secretary of Education to allot grants to State educational agencies to provide funds to local educational agencies and public schools for personal financial literacy education programs for students in kindergarten through grade 12, and for professional development programs to prepare teachers and administrators for such financial education.

Directs the Secretary to make a grant to or contract with an entity with substantial financial education experience for a national clearinghouse for instructional materials and information on model financial education programs and best practices.

SECTION 1. PROMOTING YOUTH FINANCIAL LITERACY.

    Title IV of the Elementary and Secondary Education Act of 1965 (20 
U.S.C. 7101 et seq.) is amended by adding at the end the following:

              ``PART D--PROMOTING YOUTH FINANCIAL LITERACY

``SEC. 4401. SHORT TITLE AND FINDINGS.

    ``(a) Short Title.--This part may be cited as the `Youth Financial 
Education Act'.
    ``(b) Findings.--Congress finds the following:
            ``(1) In order to succeed in our dynamic American economy, 
        young people must obtain the skills, knowledge, and experience 
        necessary to manage their personal finances and obtain general 
        financial literacy. All young adults should have the 
        educational tools necessary to make informed financial 
        decisions.
            ``(2) Despite the critical importance of financial literacy 
        to young people, the average student who graduates from high 
        school lacks basic skills in the management of personal 
        financial affairs. A nationwide survey conducted in 2002 by the 
        Jump$tart Coalition for Personal Financial Literacy examined 
        the financial knowledge of 4,024 12th graders. On average, 
        survey respondents answered only 50 percent of the questions 
        correctly. This figure is down from the 52 percent average 
        score in 2000 and the 57 percent average score in 1997.
            ``(3) An evaluation by the National Endowment for Financial 
        Education High School Financial Planning Program undertaken 
        jointly with the United States Department of Agriculture 
        Cooperative State Research, Education, and Extension Service 
        demonstrates that as little as 10 hours of classroom 
        instruction can impart substantial knowledge and affect 
        significant change in how teens handle their money.
            ``(4) State educational leaders have recognized the 
        importance of providing a basic financial education to students 
        in kindergarten through grade 12 by integrating financial 
        education into State educational standards, but by 2002 only 4 
        States required students to complete a course that covered 
        personal finance before graduating from high school.
            ``(5) Teacher training and professional development are 
        critical to achieving youth financial literacy. Teachers 
        confirm the need for professional development in personal 
        finance education. In a survey by the National Institute for 
        Consumer Education, 77 percent of a State's economics teachers 
        revealed that they had never had a college course in personal 
        finance.
            ``(6) Personal financial education helps prepare students 
        for the workforce and for financial independence by developing 
        their sense of individual responsibility, improving their life 
        skills, and providing them with a thorough understanding of 
        consumer economics that will benefit them for their entire 
        lives.
            ``(7) Financial education integrates instruction in 
        valuable life skills with instruction in economics, including 
        income and taxes, money management, investment and spending, 
        and the importance of personal savings.
            ``(8) The consumers and investors of tomorrow are in our 
        schools today. The teaching of personal finance should be 
        encouraged at all levels of our Nation's educational system, 
        from kindergarten through grade 12.

``SEC. 4402. STATE GRANT PROGRAM.

    ``(a) Program Authorized.--The Secretary is authorized to provide 
grants to State educational agencies to develop and integrate youth 
financial education programs for students in elementary schools and 
secondary schools.
    ``(b) State Plan.--
            ``(1) Approved state plan required.--To be eligible to 
        receive a grant under this section, a State educational agency 
        shall submit an application that includes a State plan, 
        described in paragraph (2), that is approved by the Secretary.
            ``(2) State plan contents.--The State plan referred to in 
        paragraph (1) shall include--
                    ``(A) a description of how the State educational 
                agency will use grant funds;
                    ``(B) a description of how the programs supported 
                by a grant will be coordinated with other relevant 
                Federal, State, regional, and local programs; and
                    ``(C) a description of how the State educational 
                agency will evaluate program performance.
    ``(c) Allocation of Funds.--
            ``(1) Allocation factors.--Except as otherwise provided in 
        paragraph (2), the Secretary shall allocate the amounts made 
        available to carry out this section pursuant to subsection (a) 
        to each State according to the relative populations in all the 
        States of students in kindergarten through grade 12, as 
        determined by the Secretary based on the most recent 
        satisfactory data.
            ``(2) Minimum allocation.--Subject to the availability of 
        appropriations and notwithstanding paragraph (1), a State that 
        has submitted a plan under subsection (b) that is approved by 
        the Secretary shall be allocated an amount that is not less 
        than $500,000 for a fiscal year.
            ``(3) Reallocation.--In any fiscal year an allocation under 
        this subsection--
                    ``(A) for a State that has not submitted a plan 
                under subsection (b); or
                    ``(B) for a State whose plan submitted under 
                subsection (b) has been disapproved by the Secretary;
        shall be reallocated to States with approved plans under this 
        section in accordance with paragraph (1).
    ``(d) Use of Grant Funds.--
            ``(1) Required uses.--A grant made to a State educational 
        agency under this part shall be used--
                    ``(A) to provide funds to local educational 
                agencies and public schools to carry out financial 
                education programs for students in kindergarten through 
                grade 12 based on the concept of achieving financial 
                literacy through the teaching of personal financial 
                management skills and the basic principles involved 
                with earning, spending, saving, and investing;
                    ``(B) to carry out professional development 
                programs to prepare teachers and administrators for 
                financial education; and
                    ``(C) to monitor and evaluate programs supported 
                under subparagraphs (A) and (B).
            ``(2) Limitation on administrative costs.--A State 
        educational agency receiving a grant under subsection (a) may 
        use not more than 4 percent of the total amount of the grant in 
        each fiscal year for the administrative costs of carrying out 
        this section.
    ``(e) Report to the Secretary.--Each State educational agency 
receiving a grant under this section shall transmit a report to the 
Secretary with respect to each fiscal year for which a grant is 
received. The report shall describe the programs supported by the grant 
and the results of the State educational agency's monitoring and 
evaluation of such programs.

``SEC. 4403. CLEARINGHOUSE.

    ``(a) Authority.--Subject to the availability of appropriations, 
the Secretary shall make a grant to, or execute a contract with, an 
eligible entity with substantial experience in the field of financial 
education, such as the Jump$tart Coalition for Personal Financial 
Literacy, to establish, operate, and maintain a national clearinghouse 
(in this part referred to as the `Clearinghouse') for instructional 
materials and information regarding model financial education programs 
and best practices.
    ``(b) Eligible Entity.--In this section, the term `eligible entity' 
means a national nonprofit organization with a proven record of--
            ``(1) cataloging youth financial literacy materials; and
            ``(2) providing support services and materials to schools 
        and other organizations that work to promote youth financial 
        literacy.
    ``(c) Application.--An eligible entity desiring to establish, 
operate, and maintain the Clearinghouse shall submit an application to 
the Secretary at such time, in such manner, and accompanied by such 
information, as the Secretary may reasonably require.
    ``(d) Basis and Term.--The Secretary shall make the grant or 
contract authorized under subsection (a) on a competitive, merit basis 
for a term of 5 years.
    ``(e) Use of Funds.--The Clearinghouse shall use the funds provided 
under a grant or contract made under subsection (a)--
            ``(1) to maintain a repository of instructional materials 
        and related information regarding financial education programs 
        for elementary schools and secondary schools, including 
        kindergartens, for use by States, localities, and the general 
        public;
            ``(2) to disseminate to States, localities, and the general 
        public, through electronic and other means, instructional 
        materials and related information regarding financial education 
        programs for elementary schools and secondary schools, 
        including kindergartens; and
            ``(3) to the extent that resources allow, to provide 
        technical assistance to States, localities, and the general 
        public on the design, establishment, and implementation of 
        financial education programs for elementary schools and 
        secondary schools, including kindergartens.
    ``(f) Consultation.--The chief executive officer of the eligible 
entity selected to establish and operate the Clearinghouse shall 
consult with the Department of the Treasury and the Securities Exchange 
Commission with respect to its activities under subsection (e).
    ``(g) Submission to Clearinghouse.--Each Federal agency or 
department that develops financial education programs and instructional 
materials for such programs shall submit to the Clearinghouse 
information on the programs and copies of the materials.
    ``(h) Application of Copyright Laws.--In carrying out this section 
the Clearinghouse shall comply with the provisions of title 17 of the 
United States Code.

``SEC. 4404. EVALUATION AND REPORT.

    ``(a) Performance Measures.--The Secretary shall develop measures 
to evaluate the performance of programs assisted under sections 4402 
and 4403.
    ``(b) Evaluation According to Performance Measures.--Applying the 
performance measures developed under subsection (a), the Secretary 
shall evaluate programs assisted under sections 4402 and 4403--
            ``(1) to judge their performance and effectiveness;
            ``(2) to identify which of the programs represent the best 
        practices of entities developing financial education programs 
        for students in kindergarten through grade 12; and
            ``(3) to identify which of the programs may be replicated 
        and used to provide technical assistance to States, localities, 
        and the general public.
    ``(c) Report.--For each fiscal year for which there are 
appropriations under section 4407(a), the Secretary shall transmit a 
report to Congress describing the status of the implementation of this 
part. The report shall include the results of the evaluation required 
under subsection (b) and a description of the programs supported under 
section 4402.

``SEC. 4405. DEFINITIONS.

    ``In this part:
            ``(1) Financial education.--The term `financial education' 
        means educational activities and experiences, planned and 
        supervised by qualified teachers, that enable students to 
        understand basic economic and consumer principals, acquire the 
        skills and knowledge necessary to manage personal and household 
        finances, and develop a range of competencies that will enable 
        them to become responsible consumers in today's complex 
        economy.
            ``(2) Qualified teacher.--The term `qualified teacher' 
        means a teacher who holds a valid teaching certification or is 
        considered to be qualified by the State educational agency in 
        the State in which the teacher works.

``SEC. 4406. PROHIBITION.

    ``Nothing in this part shall be construed to authorize an officer 
or employee of the Federal Government to mandate, direct, or control a 
State, local educational agency, or school's specific instructional 
content, curriculum, or program of instruction, as a condition of 
eligibility to receive funds under this part.

``SEC. 4407. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Authorization.--For the purposes of carrying out this part, 
there are authorized to be appropriated $100,000,000 for each of the 
fiscal years 2004 through 2008.
    ``(b) Limitation on Funds for Clearinghouse.--The Secretary may use 
not less than 2 percent and not more than 5 percent of amounts 
appropriated under subsection (a) for each fiscal year to carry out 
section 4403.
    ``(c) Limitation on Funds for Secretary Evaluation.--The Secretary 
may use not more than $200,000 from the amounts appropriated under 
subsection (a) for each fiscal year to carry out subsections (a) and 
(b) of section 4404.
    ``(d) Limitation on Administrative Costs.--Except as necessary to 
carry out subsections (a) and (b) of section 4404 using amounts 
described in subsection (c) of this section, the Secretary shall not 
use any portion of the amounts appropriated under subsection (a) for 
the costs of administering this part.''.