I 

109TH CONGRESS 

2D SESSION H. R. 5046 

To promote youth financial education. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 29, 2006 

Ms. MILLENDER-MCDONALD introduced the following bill; which was referred 

to the Committee on Education and the Workforce 

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 2004 by the Jump$tart 

12 Coalition for Personal Financial Literacy examined 

13 the financial knowledge of 4,074 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 ‘‘SEC. 4402. STATE GRANT PROGRAM. 

7 ‘‘(a) PROGRAM AUTHORIZED.—The Secretary is au8 thorized to provide grants to State educational agencies 

9 to develop and integrate youth financial education pro10 grams for students in elementary schools and secondary 

11 schools. 

12 ‘‘(b) STATE PLAN.— 

13 ‘‘(1) APPROVED STATE PLAN REQUIRED.—To 

14 be eligible to receive a grant under this section, a 

15 State educational agency shall submit an application 

16 that includes a State plan, described in paragraph 

17 (2), that is approved by the Secretary. 

18 ‘‘(2) STATE PLAN CONTENTS.—The State plan 

19 referred to in paragraph (1) shall include— 

20 ‘‘(A) a description of how the State edu21 cational agency will use grant funds; 

22 ‘‘(B) a description of how the programs 

23 supported by a grant will be coordinated with 

24 other relevant Federal, State, regional, and 

25 local programs; and 


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1 ‘‘(C) a description of how the State edu2 cational agency will evaluate program perform3 ance. 

4 ‘‘(c) ALLOCATION OF FUNDS.— 

5 ‘‘(1) ALLOCATION FACTORS.—Except as other6 wise provided in paragraph (2), the Secretary shall 

7 allocate the amounts made available to carry out 

8 this section pursuant to subsection (a) to each State 

9 according to the relative populations in all the States 

10 of students in kindergarten through grade 12, as de11 termined by the Secretary based on the most recent 

12 satisfactory 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 ‘‘(d) USE OF GRANT FUNDS.— 

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

5 State educational agency under this part shall be 

6 used— 

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

8 agencies and public schools to carry out finan9 cial education programs for students in kinder10 garten through grade 12 based on the concept 

11 of achieving financial literacy through the 

12 teaching of personal financial management 

13 skills and the basic principles involved with 

14 earning, spending, saving, and investing; 

15 ‘‘(B) to carry out professional development 

16 programs to prepare teachers and administra17 tors for financial education; and 

18 ‘‘(C) to monitor and evaluate programs 

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

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

21 A State educational agency receiving a grant under 

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

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

24 the administrative costs of carrying out this section. 


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1 ‘‘(e) REPORT TO THE SECRETARY.—Each State edu2 cational agency receiving a grant under this section shall 

3 transmit a report to the Secretary with respect to each 

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

5 describe the programs supported by the grant and the re6 sults of the State educational agency’s monitoring and 

7 evaluation of such programs. 

8 ‘‘SEC. 4403. CLEARINGHOUSE. 

9 ‘‘(a) AUTHORITY.—Subject to the availability of ap10 propriations, the Secretary shall make a grant to, or exe11 cute a contract with, an eligible entity with substantial ex12 perience in the field of financial education, such as the 

13 Jump$tart Coalition for Personal Financial Literacy, to 

14 establish, operate, and maintain a national clearinghouse 

15 (in this part referred to as the ‘Clearinghouse’) for in16 structional materials and information regarding model fi17 nancial education programs and best practices. 

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

19 ‘eligible entity’ means a national nonprofit organization 

20 with a proven record of— 

21 ‘‘(1) cataloging youth financial literacy mate22 rials; and 

23 ‘‘(2) providing support services and materials to 

24 schools and other organizations that work to pro25 mote youth financial literacy. 


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1 ‘‘(c) APPLICATION.—An eligible entity desiring to es2 tablish, operate, and maintain the Clearinghouse shall 

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

4 such manner, and accompanied by such information, as 

5 the Secretary may reasonably require. 

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

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

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

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

10 the funds provided under a grant or contract made under 

11 subsection (a)— 

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

13 materials and related information regarding finan14 cial education programs for elementary schools and 

15 secondary schools, including kindergartens, for use 

16 by States, localities, and the general public; 

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

18 general public, through electronic and other means, 

19 instructional materials and related information re20 garding financial education programs for elementary 

21 schools and secondary schools, including kinder22 gartens; and 

23 ‘‘(3) to the extent that resources allow, to pro24 vide technical assistance to States, localities, and the 

25 general public on the design, establishment, and imVerDate Aug 31 2005 22:51 Mar 31, 2006 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5046.IH H5046

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1 plementation of financial education programs for ele2 mentary schools and secondary schools, including 

3 kindergartens. 

4 ‘‘(f) CONSULTATION.—The chief executive officer of 

5 the eligible entity selected to establish and operate the 

6 Clearinghouse shall consult with the Department of the 

7 Treasury and the Securities Exchange Commission with 

8 respect to its activities under subsection (e). 

9 ‘‘(g) SUBMISSION TO CLEARINGHOUSE.—Each Fed10 eral agency or department that develops financial edu11 cation programs and instructional materials for such pro12 grams shall submit to the Clearinghouse information on 

13 the programs and copies of the materials. 

14 ‘‘(h) APPLICATION OF COPYRIGHT LAWS.—In car15 rying out this section the Clearinghouse shall comply with 

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

17 ‘‘SEC. 4404. EVALUATION AND REPORT. 

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

19 shall develop measures to evaluate the performance of pro20 grams assisted under sections 4402 and 4403. 

21 ‘‘(b) EVALUATION ACCORDING TO PERFORMANCE

22 MEASURES.—Applying the performance measures devel23 oped under subsection (a), the Secretary shall evaluate 

24 programs assisted under sections 4402 and 4403— 


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1 ‘‘(1) to judge their performance and effective2 ness; 

3 ‘‘(2) to identify which of the programs rep4 resent the best practices of entities developing finan5 cial education programs for students in kindergarten 

6 through grade 12; and 

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

8 replicated and used to provide technical assistance to 

9 States, localities, and the general public. 

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

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

12 shall transmit a report to Congress describing the status 

13 of the implementation of this part. The report shall in14 clude the results of the evaluation required under sub15 section (b) and a description of the programs supported 

16 under section 4402. 

17 ‘‘SEC. 4405. DEFINITIONS. 

18 ‘‘In this part: 

19 ‘‘(1) FINANCIAL EDUCATION.—The term ‘finan20 cial education’ means educational activities and ex21 periences, planned and supervised by qualified teach22 ers, that enable students to understand basic eco23 nomic and consumer principles, acquire the skills 

24 and knowledge necessary to manage personal and 

25 household finances, and develop a range of comVerDate Aug 31 2005 22:51 Mar 31, 2006 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H5046.IH H5046

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1 petencies that will enable the students to become re2 sponsible consumers in today’s complex economy. 

3 ‘‘(2) QUALIFIED TEACHER.—The term ‘quali4 fied teacher’ means a teacher who holds a valid 

5 teaching certification or is considered to be qualified 

6 by the State educational agency in the State in 

7 which the teacher works. 

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 

18 $100,000,000 for each of the fiscal years 2007 through 

19 2011. 

20 ‘‘(b) LIMITATION ON FUNDS FOR CLEARING21 HOUSE.—The Secretary may use not less than 2 percent 

22 and not more than 5 percent of amounts appropriated 

23 under subsection (a) for each fiscal year to carry out sec24 tion 4403. 


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1 ‘‘(c) LIMITATION ON FUNDS FOR SECRETARY EVAL2 UATION.—The Secretary may use not more than $200,000 

3 from the amounts appropriated under subsection (a) for 

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

5 section 4404. 

6 ‘‘(d) LIMITATION ON ADMINISTRATIVE COSTS.—Ex7 cept as necessary to carry out subsections (a) and (b) of 

8 section 4404 using amounts described in subsection (c) of 

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

10 amounts appropriated under subsection (a) for the costs 

11 of administering this part.’’. 

Æ 


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