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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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 add-
ing 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: 
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‘‘(1) In order to succeed in our dynamic Amer-
ican economy, young people must obtain the skills, 
knowledge, and experience necessary to manage their 
personal finances and obtain general financial lit-
eracy. 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 nation-
wide survey conducted in 2006 by the Jump$tart 
Coalition for Personal Financial Literacy examined 
the financial knowledge of 5,775 12th graders. On 
average, survey respondents answered only 52 per-
cent of the questions correctly. This figure is up only 
slightly from the 50 percent average score in 2002. 
‘‘(3) An evaluation by the National Endowment 
for Financial Education High School Financial 
Planning Program undertaken jointly with the 
United States Department of Agriculture Coopera-
tive State Research, Education, and Extension Serv-
ice demonstrates that as little as 10 hours of class-
room instruction can impart substantial knowledge 
and affect significant change in how teens handle 
their money. 
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‘‘(4) State educational leaders have recognized 
the importance of providing a basic financial edu-
cation to students in kindergarten through grade 12 
by integrating financial education into State edu-
cational standards, but by 2004, only 7 States re-
quired students to complete a course that covered 
personal finance before graduating from high school. 
‘‘(5) Teacher training and professional develop-
ment are critical to achieving youth financial lit-
eracy. Teachers should be given the tools they need 
to educate our Nation’s youth on personal finance 
and economics. 
‘‘(6) Personal financial education helps prepare 
students for the workforce and for financial inde-
pendence by developing their sense of individual re-
sponsibility, 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, in-
vestment and spending, and the importance of per-
sonal savings. 
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‘‘(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 Na-
tion’s 
educational 
system, 
from 
kindergarten 
through grade 12. 
‘‘(9) Despite worrisome data about the lack of 
basic financial literacy among our Nation’s high 
school students, the Department of Education obli-
gates less than 1 percent of its educational improve-
ment funds toward financial education efforts. 
‘‘SEC. 4402. STATE GRANT PROGRAM. 
‘‘(a) PROGRAM AUTHORIZED.—The Secretary is au-
thorized to provide grants to State educational agencies 
to develop and integrate youth financial education pro-
grams for students in elementary schools and secondary 
schools. 
‘‘(b) STATE PLAN.—To be eligible to receive a grant 
under this section, a State educational agency shall submit 
an application that includes a State plan that is approved 
by the Secretary. 
‘‘(c) ALLOCATION OF FUNDS.— 
‘‘(1) ALLOCATION FACTORS.—Except as other-
wise provided in paragraphs (2) through (4), the 
Secretary shall allocate the amounts made available 
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to carry out this section pursuant to subsection (a) 
as follows: 
‘‘(A) The first $100,000,000 for a fiscal 
year shall be allocated on a competitive basis 
based solely upon the merit of the applications 
submitted. 
‘‘(B) Any remaining amounts shall be allo-
cated to each State according to the relative 
populations in all the States of students in kin-
dergarten through grade 12, as determined by 
the Secretary based on the most recent satisfac-
tory 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 Sec-
retary shall be allocated an amount that is not less 
than $500,000 for a fiscal year. 
‘‘(3) REALLOCATION.—In any fiscal year an al-
location 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; 
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shall be reallocated to States with approved plans 
under this section in accordance with paragraph (1). 
‘‘(4) FUNDING THRESHOLD.—Until appropria-
tions 
for 
programs 
under 
this 
Act 
exceed 
$30,000,000, the Secretary shall conduct an annual 
competitive application process with funding distrib-
uted among the States based solely upon the merit 
of the applications submitted. 
‘‘(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 finan-
cial education programs for students in kinder-
garten 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, investing, credit, and 
insurance; 
‘‘(B) to carry out professional development 
programs to prepare teachers and administra-
tors for financial education; and 
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‘‘(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) APPLICATIONS BY STATES.—In order to receive 
an allotment under this section for any fiscal year, a State 
shall submit to the Secretary, at such time as the Sec-
retary may require, an application that— 
‘‘(1) designates the State educational agency as 
the agency responsible for the administration and 
supervision of programs assisted under this part; 
‘‘(2) describes how the State educational agency 
will use funds received under this part, including 
funds reserved for State-level activities; 
‘‘(3) describes how the programs assisted under 
this part will be coordinated with other relevant 
Federal, State, regional, and local programs; 
‘‘(4) contains an assurance that the State edu-
cational agency will make awards under this part 
only to eligible entities that propose to give priority 
to serving— 
‘‘(A) low-income populations; and 
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‘‘(B) populations that are above the pov-
erty level but are low income working popu-
lations; 
‘‘(5) describes the procedures and criteria the 
State educational agency will use for reviewing appli-
cations and awarding funds to eligible entities on a 
competitive basis; 
‘‘(6) describes how the State educational agency 
will ensure that awards made under this part are of 
sufficient size and scope to support high-quality, ef-
fective programs that are consistent with the pur-
pose of this part; 
‘‘(7) describes the steps the State educational 
agency will take to ensure that programs implement 
effective strategies, including providing ongoing 
technical assistance and training, evaluation, and 
dissemination of promising practices; 
‘‘(8) provides an assurance that the application 
was developed in consultation and coordination with 
appropriate State officials, including the chief State 
school officer, representatives of teachers, the busi-
ness community, and community-based organiza-
tions; and 
‘‘(9) describes how the State educational agency 
will evaluate the effectiveness of programs and ac-
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tivities carried out under this part, which shall in-
clude, at a minimum— 
‘‘(A) a description of the performance indi-
cators and performance measures that will be 
used to evaluate programs and activities; and 
‘‘(B) public dissemination of the evalua-
tions of programs and activities carried out 
under this part. 
‘‘(f) LOCAL COMPETITIVE GRANT PROGRAM.— 
‘‘(1) IN GENERAL.—A State that receives funds 
under this part for a fiscal year shall provide the 
amount made available under this section to eligible 
entities in accordance with this part. 
‘‘(2) APPLICATION.— 
‘‘(A) IN GENERAL.—To be eligible to re-
ceive an award under this part, an eligible enti-
ty shall submit an application to the State edu-
cational agency at such time, in such manner, 
and including such information as the State 
educational agency may reasonably require. 
‘‘(B) CONTENTS.—Each application sub-
mitted under subparagraph (A) shall include— 
‘‘(i) a description of how the eligible 
entity will use funds received under this 
part; 
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‘‘(ii) an identification of Federal, 
State, and local programs that will be com-
bined or coordinated with the proposed 
program to make the most effective use of 
public resources; 
‘‘(iii) a description of the partnership 
between a local educational agency, a com-
munity-based organization, and another 
public entity or private entity, if appro-
priate; 
‘‘(iv) an evaluation of the community 
needs and available resources and a de-
scription of how the program proposed to 
be carried out in the center will address 
those needs; 
‘‘(v) a demonstration that the eligible 
entity has experience, or promise of suc-
cess, in providing educational and related 
activities that will complement and en-
hance positive youth development of the 
students; and 
‘‘(vi) if the eligible entity plans to use 
volunteers, a description of how the eligible 
entity will encourage and use individuals 
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with appropriate financial literacy quali-
fications to serve as the volunteers; and 
‘‘(vii) such other information and as-
surances as the State educational agency 
may reasonably require. 
‘‘(3) AMOUNT OF AWARDS.—A grant awarded 
under this part may not be made in an amount that 
is less than $50,000. 
‘‘(4) PRIORITY.—In awarding grants under this 
part, a State educational agency shall give priority 
to applications proposing to give priority to serv-
ing— 
‘‘(A) low-income populations; and 
‘‘(B) populations that are above the pov-
erty level but are low income working popu-
lations. 
‘‘(g) REPORT TO THE SECRETARY.—Each State edu-
cational 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 re-
sults of the State educational agency’s monitoring and 
evaluation of such programs. 
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‘‘SEC. 4403. CLEARINGHOUSE. 
‘‘(a) AUTHORITY.—Subject to the availability of ap-
propriations, the Secretary shall make a grant to, or exe-
cute a contract with, an eligible entity with substantial ex-
perience in the field of financial education to establish, op-
erate, and maintain a national clearinghouse (in this part 
referred to as the ‘Clearinghouse’) for instructional mate-
rials and information regarding model financial education 
programs and best practices. 
‘‘(b) ELIGIBLE ENTITY.—In this section, the term 
‘eligible entity’ means— 
‘‘(1) an institution of higher education; or 
‘‘(2) a national nonprofit organization. 
‘‘(c) APPLICATION.—An eligible entity desiring to es-
tablish, 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 finan-
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cial education programs for elementary schools and 
secondary schools, including kindergartens, for use 
by States, localities, and the general public, that 
take into account limited-English populations and 
cultural differences and sensitivities among various 
populations; 
‘‘(2) to disseminate to States, localities, and the 
general public, through electronic and other means, 
instructional materials and related information re-
garding financial education programs for elementary 
schools and secondary schools, including kinder-
gartens; and 
‘‘(3) to the extent that resources allow, to pro-
vide technical assistance to States, localities, and the 
general public on the design, establishment, and im-
plementation of financial education programs for ele-
mentary schools and secondary schools, including 
kindergartens. 
‘‘(f) CONSULTATION.—The administrator of the eligi-
ble entity selected to establish and operate the Clearing-
house shall consult with community-based organizations, 
educational institutions, and financial organizations, and 
with appropriate elements of the Federal Government, if 
appropriate. 
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‘‘(g) SUBMISSION TO CLEARINGHOUSE.—Each Fed-
eral agency or department that develops financial edu-
cation programs and instructional materials for such pro-
grams shall submit to the Clearinghouse information on 
the programs and copies of the materials. 
‘‘(h) APPLICATION OF COPYRIGHT LAWS.—In car-
rying 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 pro-
grams assisted under sections 4402 and 4403. 
‘‘(b) EVALUATION ACCORDING
TO PERFORMANCE 
MEASURES.—Applying the performance measures devel-
oped under subsection (a), the Secretary shall evaluate 
programs assisted under sections 4402 and 4403— 
‘‘(1) to judge their performance and effective-
ness; 
‘‘(2) to identify which of the programs rep-
resent the best practices of entities developing finan-
cial education programs for students in kindergarten 
through grade 12; 
‘‘(3) to identify which of the programs may be 
replicated and used to provide technical assistance to 
States, localities, and the general public; and 
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‘‘(4) to assess whether educational practices de-
scribed herein increased the aptitude and ability of 
students to manage financial resources including 
credit cards, insurance, savings accounts and stu-
dent loans. 
‘‘(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 in-
clude the results of the evaluation required under sub-
section (b) and a description of the programs supported 
under section 4402. 
‘‘SEC. 4405. DEFINITIONS. 
‘‘In this part: 
‘‘(1) FINANCIAL EDUCATION.—The term ‘finan-
cial education’ means educational activities and ex-
periences, planned and supervised by qualified teach-
ers, that enable students to understand basic eco-
nomic and consumer principles, acquire the skills 
and knowledge necessary to manage personal and 
household finances, and develop a range of com-
petencies that will enable the students to become re-
sponsible consumers in today’s complex economy. 
‘‘(2) QUALIFIED TEACHER.—The term ‘quali-
fied teacher’ means a teacher who holds a valid 
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teaching certification or is considered to be qualified 
by the State educational agency in the State in 
which the teacher works. 
‘‘(3) STATE.—The term ‘State’ includes the 
District of Columbia, the Commonwealth of Puerto 
Rico, and any other territories or possessions of the 
United States. 
‘‘SEC. 4406. PROHIBITION. 
‘‘Nothing in this part shall be construed to authorize 
an officer or employee of the Federal Government to man-
date, 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 re-
ceive 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, for 
each of fiscal years 2010 through 2014, the following: 
‘‘(1) GRANT PROGRAM.—$100,000,000 to carry 
out section 4402. 
‘‘(2) CLEARINGHOUSE.—$1,500,000 to carry 
out section 4403. 
‘‘(b) LIMITATION ON FUNDS FOR SECRETARY EVAL-
UATION.—The Secretary may use not more than $200,000 
from the amounts appropriated under subsection (a) for 
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each fiscal year to carry out subsections (a) and (b) of 
section 4404. 
‘‘(c) LIMITATION ON ADMINISTRATIVE COSTS.—Ex-
cept as necessary to carry out subsections (a) and (b) of 
section 4404 using amounts described in subsection (b) 
of this section, the Secretary shall not use any portion of 
the amounts appropriated under subsection (a) for the 
costs of administering this part.’’. 
SEC. 2. FUNDING SETASIDE FOR FINANCIAL LITERACY AC-
TIVITIES. 
Part D of title V of the Elementary and Secondary 
Education Act of 1965 is amended by inserting after sec-
tion 5401 (20 U.S.C. 7241) the following: 
‘‘SEC. 5402. FUNDING SETASIDE FOR FINANCIAL LITERACY 
ACTIVITIES. 
‘‘Notwithstanding any other provision of this title, 
the Secretary shall set aside two percent of the funds ap-
propriated to carry out this part for each fiscal year. The 
funds set aside shall be used to support financial literacy 
activities under subpart 13.’’. 
Æ 
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