Konstatin Makarov, a teacher at Vantage Point High School in Northglenn, warns his students that relying on payday loans can result in interest rates of 575 percent.
“So if you borrow $100, you have to pay $575 back?” asks Matt Doran, a student in the class.
Makarov answers “yes” if that amount is continually rolled over for a year – and the principal of $100 would still be owed. Even a high-interest credit-card rate of 28 percent would be more affordable, he said.
Across nine weeks, Makarov will teach his students about banking, credit, budgeting, taxes, insurance, investing, retirement planning and, if there is time, entrepreneurship.
Many schools in Colorado don’t emphasize personal finance, slip slivers of it into other courses or make it an elective. Students at Vantage Point High need to master personal finance or they don’t graduate.
Some of the alternative school’s students are already living on their own, and most work after school, often because they need to support their families, said principal Nancy MacDonnell.
“It gets us ready for the real world,” said Dina Rodd, a student at Vantage Point who works a retail job so she can help her mom make the rent.
The 17-year-old said she relies on a check- cashing service because banks confuse her, something that will change if Makarov has his way.
Although Colorado school districts have established educational standards for economics, the state is among 10 that lack standards for personal-finance education, said Robert Clinton, president of the Colorado Council on Economic Education.
Toward its goal of seeing students leave high school as financially savvy consumers, the CCEE is focused on convincing administrators and teachers that the subject is worth devoting limited resources to.
The CCEE wants the Colorado State Board of Education to propose voluntary guidelines for personal finance but may back legislation if that fails.
“If the State Board of Education could pick it up on their own, that would be preferable,” said Rep. David Balmer, R-Centennial, who is on the group’s board of directors.
Although some educators view financial education as the domain of parents, too often parents themselves aren’t informed.
“Often, parents teach the wrong lessons by wrong examples,” said Robert Duvall, chief executive of the National Council on Economic Education, which recently hosted a national conference in Denver to team teachers with college educators.
Financial difficulties are a major driver of divorce and personal stress. Poor financial decisions can limit the educational and career options that people pursue.
Students will learn the lessons they need one way or the other, Duvall said, so why not teach them before they make costly mistakes?
“Experience is the hard way to learn,” Duvall said.
Also, the U.S. risks falling behind globally if deficit spending and inadequate domestic savings leave it heavily dependent on foreign lenders.
And the drive to make the U.S. an “ownership” society, including workers funding their own retirements, won’t work unless citizens are better-informed, Duvall said.
Even along the Front Range, which boasts high incomes and low unemployment, the lack of financial education has come back to bite as evidenced by one of the highest foreclosure rates in the country, said Clinton of the CCEE.
Consumers who chased loans with short-term benefits but were costly in the longer run are part of that equation.
Unlike Vantage, many schools teach personal finance on an ad-hoc basis, including it as part of math or other courses or slipping in a session when they can.
At West High School in Denver, about 40 students, several in Broncos jerseys, faced off in early October. Visa and the National Football League hosted a statewide launch for “Financial Football,” an interactive game designed to get kids interested in personal finance.
U.S. Sen. Wayne Allard coached the Chargers, while former Broncos linebacker Karl Mecklenburg got the Broncos.
Teams got to move down the field as they answered personal-finance questions. Unlike in some recent games at Invesco Field, the Broncos won this one, and students got more excited than they might have in a traditional lesson.
“The average American is struggling with these issues,” said Pat Sanchez, principal of West. “Key for us is finding a real-world application.”
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
Money players
Below are some of the questions from “Financial Football,” a game designed to teach high school students personal finance. Are you game?
1. To figure out how many years it will take to double your money, take this number and divide it by your interest rate.
2. An organization that provides companies with information on a person’s past use of credit is called a:
3. The total interest earned on $100 for two years at 10 percent, compounded annually, would be:
Answers: 72, credit bureau, $21
Source:
This article has been corrected in this online archive. Originally, due to a reporting error, an incorrect last name was used for Nancy MacDonnell, the principal of Vantage Point High School.
