One important reform that has quietly advanced during this year’s legislative session is House Bill 163, which would make a one-semester course in financial literacy a graduation requirement for New Mexico’s high school students. The bill is being co-sponsored by Representatives Moe Maestas (D-Albuquerque), Meredith Dixon (D-Albuquerque), Willie Madrid (D-Chaparral), Jane Powdrell-Culbert (R-Albuquerque), and Melanie Stansbury (D-Albuquerque).
House Bill 163 passed the House unanimously and has been awaiting a vote of the full Senate for several days.
This bill matters because New Mexico scores very poorly on measures of financial literacy. For example, WalletHub, the personal finance website, ranked New Mexico 47th for overall financial literacy in 2019.
Financial literacy courses teach students critically important life skills, like budgeting, saving, investing, credit scores, and the costs of borrowing. New Mexico’s students need these tools to break out of generational cycles of poverty. When students become more financially knowledgeable, they often teach what they have learned to their parents, benefitting the whole family.
New Mexico is one of a shrinking number of states that do not require students to take a course in financial literacy before they graduate from high school. Twenty-one states have made financial literacy a high school graduation requirement, with 17 of them adding it in the last decade. States with financial literacy requirements include three of New Mexico’s neighbors: Texas, Utah, and Arizona.
In our most recent policy report, Think New Mexico recommended that New Mexico follow the lead of these states and make financial literacy a graduation requirement for our students.
Since 2008, financial literacy has been available as an elective course for high school students in New Mexico’s public schools. Yet, only about 11% of New Mexico’s high school students completed one of these classes during the 2019-2020 school year.
Making financial literacy a graduation requirement would not only give students the tools they need to better manage their finances, it could also help raise New Mexico’s low graduation rate. One reason why students drop out is that they do not see the relevance of schoolwork to their lives. A benefit of finance courses it that they are tailored to be highly relevant to students, with focuses on things like the cost of college and student loans, or budgeting and saving as they begin their first jobs. This will help keep students engaged and in school.
Along with Think New Mexico, House Bill 163 is supported by groups including the League of Women Voters New Mexico, AAUW-NM (the American Association of University Women), the Credit Union Association of New Mexico, Independent Community Bankers Association of New Mexico, the Greater Albuquerque Chamber of Commerce, and Michael Riordan, President and CEO of the Jennifer Riordan Foundation.
At a time when New Mexico families are facing severe financial distress, we need to both address immediate needs and also look to the future by giving our students the tools to make the best financial decisions for their families.
If you agree that we should make financial literacy a high school graduation requirement, please visit the Action Center on Think New Mexico’s website at www.thinknewmexico.org and urge your legislators to pass House Bill 163 and the governor to sign it into law.
Fred Nathan is the director of Think New Mexico, a nonpartisan, results-oriented think tank serving New Mexicans.