I 

111TH CONGRESS 

1ST SESSION H. R. 2012 

To promote youth financial education. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 21, 2009 

Mr. PAYNE introduced the following bill; which was referred to the Committee 

on Education and Labor 

A BILL 

To promote youth financial education. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. PROMOTING YOUTH FINANCIAL LITERACY. 

4 Title IV of the Elementary and Secondary Education 

5 Act of 1965 (20 U.S.C. 7101 et seq.) is amended by add6 ing at the end the following: 

7 ‘‘PART D—PROMOTING YOUTH FINANCIAL 

8 LITERACY 

9 ‘‘SEC. 4401. SHORT TITLE AND FINDINGS. 

10 ‘‘(a) SHORT TITLE.—This part may be cited as the 

11 ‘Youth Financial Education Act’. 

12 ‘‘(b) FINDINGS.—Congress finds the following: 


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1 ‘‘(1) In order to succeed in our dynamic Amer2 ican economy, young people must obtain the skills, 

3 knowledge, and experience necessary to manage their 

4 personal finances and obtain general financial lit5 eracy. All young adults should have the educational 

6 tools necessary to make informed financial decisions. 

7 ‘‘(2) Despite the critical importance of financial 

8 literacy to young people, the average student who 

9 graduates from high school lacks basic skills in the 

10 management of personal financial affairs. A nation11 wide survey conducted in 2006 by the Jump$tart 

12 Coalition for Personal Financial Literacy examined 

13 the financial knowledge of 5,775 12th graders. On 

14 average, survey respondents answered only 52 per15 cent of the questions correctly. This figure is up only 

16 slightly from the 50 percent average score in 2002. 

17 ‘‘(3) An evaluation by the National Endowment 

18 for Financial Education High School Financial 

19 Planning Program undertaken jointly with the 

20 United States Department of Agriculture Coopera21 tive State Research, Education, and Extension Serv22 ice demonstrates that as little as 10 hours of class23 room instruction can impart substantial knowledge 

24 and affect significant change in how teens handle 

25 their money. 


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1 ‘‘(4) State educational leaders have recognized 

2 the importance of providing a basic financial edu3 cation to students in kindergarten through grade 12 

4 by integrating financial education into State edu5 cational standards, but by 2004, only 7 States re6 quired students to complete a course that covered 

7 personal finance before graduating from high school. 

8 ‘‘(5) Teacher training and professional develop9 ment are critical to achieving youth financial lit10 eracy. Teachers should be given the tools they need 

11 to educate our Nation’s youth on personal finance 

12 and economics. 

13 ‘‘(6) Personal financial education helps prepare 

14 students for the workforce and for financial inde15 pendence by developing their sense of individual re16 sponsibility, improving their life skills, and providing 

17 them with a thorough understanding of consumer 

18 economics that will benefit them for their entire 

19 lives. 

20 ‘‘(7) Financial education integrates instruction 

21 in valuable life skills with instruction in economics, 

22 including income and taxes, money management, in23 vestment and spending, and the importance of per24 sonal savings. 


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1 ‘‘(8) The consumers and investors of tomorrow 

2 are in our schools today. The teaching of personal 

3 finance should be encouraged at all levels of our Na4 tion’s educational system, from kindergarten 

5 through grade 12. 

6 ‘‘(9) Despite worrisome data about the lack of 

7 basic financial literacy among our Nation’s high 

8 school students, the Department of Education obli9 gates less than 1 percent of its educational improve10 ment funds toward financial education efforts. 

11 ‘‘SEC. 4402. STATE GRANT PROGRAM. 

12 ‘‘(a) PROGRAM AUTHORIZED.—The Secretary is au13 thorized to provide grants to State educational agencies 

14 to develop and integrate youth financial education pro15 grams for students in elementary schools and secondary 

16 schools. 

17 ‘‘(b) STATE PLAN.—To be eligible to receive a grant 

18 under this section, a State educational agency shall submit 

19 an application that includes a State plan that is approved 

20 by the Secretary. 

21 ‘‘(c) ALLOCATION OF FUNDS.— 

22 ‘‘(1) ALLOCATION FACTORS.—Except as other23 wise provided in paragraphs (2) through (4), the 

24 Secretary shall allocate the amounts made available 


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1 to carry out this section pursuant to subsection (a) 

2 as follows: 

3 ‘‘(A) The first $100,000,000 for a fiscal 

4 year shall be allocated on a competitive basis 

5 based solely upon the merit of the applications 

6 submitted. 

7 ‘‘(B) Any remaining amounts shall be allo8 cated to each State according to the relative 

9 populations in all the States of students in kin10 dergarten through grade 12, as determined by 

11 the Secretary based on the most recent satisfac12 tory data. 

13 ‘‘(2) MINIMUM ALLOCATION.—Subject to the 

14 availability of appropriations and notwithstanding 

15 paragraph (1), a State that has submitted a plan 

16 under subsection (b) that is approved by the Sec17 retary shall be allocated an amount that is not less 

18 than $500,000 for a fiscal year. 

19 ‘‘(3) REALLOCATION.—In any fiscal year an al20 location under this subsection— 

21 ‘‘(A) for a State that has not submitted a 

22 plan under subsection (b); or 

23 ‘‘(B) for a State whose plan submitted 

24 under subsection (b) has been disapproved by 

25 the Secretary; 


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1 shall be reallocated to States with approved plans 

2 under this section in accordance with paragraph (1). 

3 ‘‘(4) FUNDING THRESHOLD.—Until appropria4 tions for programs under this Act exceed 

5 $30,000,000, the Secretary shall conduct an annual 

6 competitive application process with funding distrib7 uted among the States based solely upon the merit 

8 of the applications submitted. 

9 ‘‘(d) USE OF GRANT FUNDS.— 

10 ‘‘(1) REQUIRED USES.—A grant made to a 

11 State educational agency under this part shall be 

12 used— 

13 ‘‘(A) to provide funds to local educational 

14 agencies and public schools to carry out finan15 cial education programs for students in kinder16 garten through grade 12 based on the concept 

17 of achieving financial literacy through the 

18 teaching of personal financial management 

19 skills and the basic principles involved with 

20 earning, spending, saving, investing, credit, and 

21 insurance; 

22 ‘‘(B) to carry out professional development 

23 programs to prepare teachers and administra24 tors for financial education; and 


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1 ‘‘(C) to monitor and evaluate programs 

2 supported under subparagraphs (A) and (B). 

3 ‘‘(2) LIMITATION ON ADMINISTRATIVE COSTS.— 

4 A State educational agency receiving a grant under 

5 subsection (a) may use not more than 4 percent of 

6 the total amount of the grant in each fiscal year for 

7 the administrative costs of carrying out this section. 

8 ‘‘(e) APPLICATIONS BY STATES.—In order to receive 

9 an allotment under this section for any fiscal year, a State 

10 shall submit to the Secretary, at such time as the Sec11 retary may require, an application that— 

12 ‘‘(1) designates the State educational agency as 

13 the agency responsible for the administration and 

14 supervision of programs assisted under this part; 

15 ‘‘(2) describes how the State educational agency 

16 will use funds received under this part, including 

17 funds reserved for State-level activities; 

18 ‘‘(3) describes how the programs assisted under 

19 this part will be coordinated with other relevant 

20 Federal, State, regional, and local programs; 

21 ‘‘(4) contains an assurance that the State edu22 cational agency will make awards under this part 

23 only to eligible entities that propose to give priority 

24 to serving— 

25 ‘‘(A) low-income populations; and 


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1 ‘‘(B) populations that are above the pov2 erty level but are low income working popu3 lations; 

4 ‘‘(5) describes the procedures and criteria the 

5 State educational agency will use for reviewing appli6 cations and awarding funds to eligible entities on a 

7 competitive basis; 

8 ‘‘(6) describes how the State educational agency 

9 will ensure that awards made under this part are of 

10 sufficient size and scope to support high-quality, ef11 fective programs that are consistent with the pur12 pose of this part; 

13 ‘‘(7) describes the steps the State educational 

14 agency will take to ensure that programs implement 

15 effective strategies, including providing ongoing 

16 technical assistance and training, evaluation, and 

17 dissemination of promising practices; 

18 ‘‘(8) provides an assurance that the application 

19 was developed in consultation and coordination with 

20 appropriate State officials, including the chief State 

21 school officer, representatives of teachers, the busi22 ness community, and community-based organiza23 tions; and 

24 ‘‘(9) describes how the State educational agency 

25 will evaluate the effectiveness of programs and acVerDate Nov 24 2008 03:07 Apr 23, 2009 Jkt 079200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2012.IH H2012

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1 tivities carried out under this part, which shall in2 clude, at a minimum— 

3 ‘‘(A) a description of the performance indi4 cators and performance measures that will be 

5 used to evaluate programs and activities; and 

6 ‘‘(B) public dissemination of the evalua7 tions of programs and activities carried out 

8 under this part. 

9 ‘‘(f) LOCAL COMPETITIVE GRANT PROGRAM.— 

10 ‘‘(1) IN GENERAL.—A State that receives funds 

11 under this part for a fiscal year shall provide the 

12 amount made available under this section to eligible 

13 entities in accordance with this part. 

14 ‘‘(2) APPLICATION.— 

15 ‘‘(A) IN GENERAL.—To be eligible to re16 ceive an award under this part, an eligible enti17 ty shall submit an application to the State edu18 cational agency at such time, in such manner, 

19 and including such information as the State 

20 educational agency may reasonably require. 

21 ‘‘(B) CONTENTS.—Each application sub22 mitted under subparagraph (A) shall include— 

23 ‘‘(i) a description of how the eligible 

24 entity will use funds received under this 

25 part; 


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1 ‘‘(ii) an identification of Federal, 

2 State, and local programs that will be com3 bined or coordinated with the proposed 

4 program to make the most effective use of 

5 public resources; 

6 ‘‘(iii) a description of the partnership 

7 between a local educational agency, a com8 munity-based organization, and another 

9 public entity or private entity, if appro10 priate; 

11 ‘‘(iv) an evaluation of the community 

12 needs and available resources and a de13 scription of how the program proposed to 

14 be carried out in the center will address 

15 those needs; 

16 ‘‘(v) a demonstration that the eligible 

17 entity has experience, or promise of suc18 cess, in providing educational and related 

19 activities that will complement and en20 hance positive youth development of the 

21 students; and 

22 ‘‘(vi) if the eligible entity plans to use 

23 volunteers, a description of how the eligible 

24 entity will encourage and use individuals 


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1 with appropriate financial literacy quali2 fications to serve as the volunteers; and 

3 ‘‘(vii) such other information and as4 surances as the State educational agency 

5 may reasonably require. 

6 ‘‘(3) AMOUNT OF AWARDS.—A grant awarded 

7 under this part may not be made in an amount that 

8 is less than $50,000. 

9 ‘‘(4) PRIORITY.—In awarding grants under this 

10 part, a State educational agency shall give priority 

11 to applications proposing to give priority to serv12 ing— 

13 ‘‘(A) low-income populations; and 

14 ‘‘(B) populations that are above the pov15 erty level but are low income working popu16 lations. 

17 ‘‘(g) REPORT TO THE SECRETARY.—Each State edu18 cational agency receiving a grant under this section shall 

19 transmit a report to the Secretary with respect to each 

20 fiscal year for which a grant is received. The report shall 

21 describe the programs supported by the grant and the re22 sults of the State educational agency’s monitoring and 

23 evaluation of such programs. 


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1 ‘‘SEC. 4403. CLEARINGHOUSE. 

2 ‘‘(a) AUTHORITY.—Subject to the availability of ap3 propriations, the Secretary shall make a grant to, or exe4 cute a contract with, an eligible entity with substantial ex5 perience in the field of financial education to establish, op6 erate, and maintain a national clearinghouse (in this part 

7 referred to as the ‘Clearinghouse’) for instructional mate8 rials and information regarding model financial education 

9 programs and best practices. 

10 ‘‘(b) ELIGIBLE ENTITY.—In this section, the term 

11 ‘eligible entity’ means— 

12 ‘‘(1) an institution of higher education; or 

13 ‘‘(2) a national nonprofit organization. 

14 ‘‘(c) APPLICATION.—An eligible entity desiring to es15 tablish, operate, and maintain the Clearinghouse shall 

16 submit an application to the Secretary at such time, in 

17 such manner, and accompanied by such information, as 

18 the Secretary may reasonably require. 

19 ‘‘(d) BASIS AND TERM.—The Secretary shall make 

20 the grant or contract authorized under subsection (a) on 

21 a competitive, merit basis for a term of 5 years. 

22 ‘‘(e) USE OF FUNDS.—The Clearinghouse shall use 

23 the funds provided under a grant or contract made under 

24 subsection (a)— 

25 ‘‘(1) to maintain a repository of instructional 

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1 cial education programs for elementary schools and 

2 secondary schools, including kindergartens, for use 

3 by States, localities, and the general public, that 

4 take into account limited-English populations and 

5 cultural differences and sensitivities among various 

6 populations; 

7 ‘‘(2) to disseminate to States, localities, and the 

8 general public, through electronic and other means, 

9 instructional materials and related information re10 garding financial education programs for elementary 

11 schools and secondary schools, including kinder12 gartens; and 

13 ‘‘(3) to the extent that resources allow, to pro14 vide technical assistance to States, localities, and the 

15 general public on the design, establishment, and im16 plementation of financial education programs for ele17 mentary schools and secondary schools, including 

18 kindergartens. 

19 ‘‘(f) CONSULTATION.—The administrator of the eligi20 ble entity selected to establish and operate the Clearing21 house shall consult with community-based organizations, 

22 educational institutions, and financial organizations, and 

23 with appropriate elements of the Federal Government, if 

24 appropriate. 


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1 ‘‘(g) SUBMISSION TO CLEARINGHOUSE.—Each Fed2 eral agency or department that develops financial edu3 cation programs and instructional materials for such pro4 grams shall submit to the Clearinghouse information on 

5 the programs and copies of the materials. 

6 ‘‘(h) APPLICATION OF COPYRIGHT LAWS.—In car7 rying out this section the Clearinghouse shall comply with 

8 the provisions of title 17 of the United States Code. 

9 ‘‘SEC. 4404. EVALUATION AND REPORT. 

10 ‘‘(a) PERFORMANCE MEASURES.—The Secretary 

11 shall develop measures to evaluate the performance of pro12 grams assisted under sections 4402 and 4403. 

13 ‘‘(b) EVALUATION ACCORDING TO PERFORMANCE

14 MEASURES.—Applying the performance measures devel15 oped under subsection (a), the Secretary shall evaluate 

16 programs assisted under sections 4402 and 4403— 

17 ‘‘(1) to judge their performance and effective18 ness; 

19 ‘‘(2) to identify which of the programs rep20 resent the best practices of entities developing finan21 cial education programs for students in kindergarten 

22 through grade 12; 

23 ‘‘(3) to identify which of the programs may be 

24 replicated and used to provide technical assistance to 

25 States, localities, and the general public; and 


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1 ‘‘(4) to assess whether educational practices de2 scribed herein increased the aptitude and ability of 

3 students to manage financial resources including 

4 credit cards, insurance, savings accounts and stu5 dent loans. 

6 ‘‘(c) REPORT.—For each fiscal year for which there 

7 are appropriations under section 4407(a), the Secretary 

8 shall transmit a report to Congress describing the status 

9 of the implementation of this part. The report shall in10 clude the results of the evaluation required under sub11 section (b) and a description of the programs supported 

12 under section 4402. 

13 ‘‘SEC. 4405. DEFINITIONS. 

14 ‘‘In this part: 

15 ‘‘(1) FINANCIAL EDUCATION.—The term ‘finan16 cial education’ means educational activities and ex17 periences, planned and supervised by qualified teach18 ers, that enable students to understand basic eco19 nomic and consumer principles, acquire the skills 

20 and knowledge necessary to manage personal and 

21 household finances, and develop a range of com22 petencies that will enable the students to become re23 sponsible consumers in today’s complex economy. 

24 ‘‘(2) QUALIFIED TEACHER.—The term ‘quali25 fied teacher’ means a teacher who holds a valid 


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1 teaching certification or is considered to be qualified 

2 by the State educational agency in the State in 

3 which the teacher works. 

4 ‘‘(3) STATE.—The term ‘State’ includes the 

5 District of Columbia, the Commonwealth of Puerto 

6 Rico, and any other territories or possessions of the 

7 United States. 

8 ‘‘SEC. 4406. PROHIBITION. 

9 ‘‘Nothing in this part shall be construed to authorize 

10 an officer or employee of the Federal Government to man11 date, direct, or control a State, local educational agency, 

12 or school’s specific instructional content, curriculum, or 

13 program of instruction, as a condition of eligibility to re14 ceive funds under this part. 

15 ‘‘SEC. 4407. AUTHORIZATION OF APPROPRIATIONS. 

16 ‘‘(a) AUTHORIZATION.—For the purposes of carrying 

17 out this part, there are authorized to be appropriated, for 

18 each of fiscal years 2010 through 2014, the following: 

19 ‘‘(1) GRANT PROGRAM.—$100,000,000 to carry 

20 out section 4402. 

21 ‘‘(2) CLEARINGHOUSE.—$1,500,000 to carry 

22 out section 4403. 

23 ‘‘(b) LIMITATION ON FUNDS FOR SECRETARY EVAL24 UATION.—The Secretary may use not more than $200,000 

25 from the amounts appropriated under subsection (a) for 


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1 each fiscal year to carry out subsections (a) and (b) of 

2 section 4404. 

3 ‘‘(c) LIMITATION ON ADMINISTRATIVE COSTS.—Ex4 cept as necessary to carry out subsections (a) and (b) of 

5 section 4404 using amounts described in subsection (b) 

6 of this section, the Secretary shall not use any portion of 

7 the amounts appropriated under subsection (a) for the 

8 costs of administering this part.’’. 

9 SEC. 2. FUNDING SETASIDE FOR FINANCIAL LITERACY AC10 TIVITIES. 

11 Part D of title V of the Elementary and Secondary 

12 Education Act of 1965 is amended by inserting after sec13 tion 5401 (20 U.S.C. 7241) the following: 

14 ‘‘SEC. 5402. FUNDING SETASIDE FOR FINANCIAL LITERACY 

15 ACTIVITIES. 

16 ‘‘Notwithstanding any other provision of this title, 

17 the Secretary shall set aside two percent of the funds ap18 propriated to carry out this part for each fiscal year. The 

19 funds set aside shall be used to support financial literacy 

20 activities under subpart 13.’’. 

Æ 


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