For more than a decade, high school students in the eastern Hi-Line city of Saco have been required to take classes on debt management, budgeting and financial investing on their way to graduation. What began as an elective quickly evolved into a two-semester required course for graduation that is a perennial favorite among students and parents alike, according to Tanya Funk, superintendent of Saco Public Schools.

“Some students are fortunate enough to come from homes where parents take the time to talk to their kids about these things and teach them, but many of our kids don’t come from homes like that anymore,” said Funk, who taught the course herself for years before becoming principal. “So the onus is on the school to develop responsible consumers and to develop students who can be productive members of society and not get into so much debt that they never get out of it.”

The district’s experience teaching financial literacy offers a glimpse into the near future of public schools across Montana. Last year, Montana’s Board of Public Education approved a series of regulatory changes that include two new statewide graduation requirements: a half-credit in civics and a half-credit in financial literacy or economics, both set to take effect next July. The move was strongly promoted by Superintendent Elsie Arntzen during her agency’s broader review of school accreditation rules and was embraced during the 2023 legislative session by lawmakers who passed a bipartisan measure to support financial literacy instruction.

The new civics requirement will prove a much easier task for districts, according to numerous local and state education leaders, who told the Montana Free Press that existing civics and social studies courses largely meet the standards set by the state. Teaching students about checking accounts, student loans, personal investments and other financial topics is a slightly different matter, and although the requirement won’t take effect until the class of 2026 is close to graduating, districts large and small have already taken steps to prepare.

For Missoula County Public Schools, that conversation began in fall 2023 as the district worked to plan a range of pathways for its students. Assistant Superintendent Amy Shattuck said the state Board of Education gave local administrators significant flexibility in meeting the requirement, allowing financial literacy to be taught through existing courses in math, family and consumer science, business or career and technical education. MCPS recognized the need to implement the change quickly, she added, because 11th- and 12th-grade students often already struggle with a full class load.

“When our students come into college as a freshman, we like to try to create a template for their four-year plan,” Shattuck said. “Because this was happening in the middle of their high school careers for this class of 2026, we had to make sure we planned ahead and the counselors knew in advance so they could work this into their schedule.”

Shattuck added that the new rule will not require the district’s four high schools to hire additional teaching staff.

Among other things, MCPS plans to deliver financial education through outside providers, including the Montana Digital Academy, a state online program created by the Legislature in 2009 to offer digital instructional materials and resources to Montana schools. Executive Director Jason Neiffer said the academy has spoken to leaders of about a dozen districts over the past six months about the change and is developing a broader communications strategy for the upcoming 2024-25 school year to inform other schools about its offerings.

“We don’t have a specific district that has chosen to do this yet,” Neiffer added, “but since it’s still a while before it’s required, we expect some districts will work with us to provide this traditional distance learning model.”

Neiffer noted that in addition to virtual courses led by a qualified instructor, the academy also offers digital content and classroom materials through its online clearinghouse, which Montana lawmakers voted to expand last year. Neiffer said these resources can help districts develop and roll out their own financial literacy curricula for use by local teachers or adapt existing courses to meet the state’s financial literacy standards.

A similar situation is emerging in eastern Montana, where Miles Community College has expanded a dual education partnership with 31 school districts – called “Opportunity Realized” – to include a course in business and personal finance. President Ron Slinger, who also sits on the Board of Public Education, told MTFP this week that the expansion is designed to meet state standards for financial literacy and is offered by the college campus at no cost to participating districts or their students.

“We know our partner schools have limited resources to meet these new demands,” Slinger said. “The MCC Opportunity Realized Program allows our college to be an active partner in helping them meet these new demands while providing tremendous opportunities for their students.”

Montana isn’t the only state placing increasing emphasis on financial literacy among high school students. Carly Urban, an economics professor and researcher at Montana State University, said the change in statewide graduation requirements reflects a national trend over the past five years. Twenty-three states have now passed laws requiring a full semester of personal finance for high school graduation, and 35 have enshrined such instruction elsewhere in their public education regulations. Many of the laws on the subject are relatively new, Urban noted, meaning the requirements have not yet fully taken effect.

“I will say that the graduating class of 2024 actually required a full semester in eight states, and that gives you a good sense of how much progress there has been in the last few years,” Urban said. “Schools aren’t affected by it yet, but we’re going to see a lot of it in the graduating class of 2030.”

Urban has been researching financial literacy in public education and related state requirements for more than a decade and said she shared her findings with the Office of Public Instruction as it developed resources for schools implementing the new standards. Based on her findings, Urban said, the consequences of such instruction for students include better credit scores, better decisions about student loan repayment and a lower likelihood of falling behind on debt.

“They’re taking out a little more public student loans, but they’re using less credit card debt, which is actually a very common way to finance things like housing, food or textbooks, and which carries higher interest rates,” Urban said. “So we’re basically seeing better borrowing.”

Urban added that results from other researchers she has seen also point to a decrease in short-term borrowing among people who received personal finance education in high school. One result she has not noticed, however, is an increase in the amount of money students invest or save, leading her to believe that the biggest consequence of such courses so far is the avoidance of “really bad debt decisions.”

That’s largely consistent with what Funk has found in Saco Public Schools, where lessons on student loans and responsible credit card use have been a “huge hit” with students. She said she’s also seen the topic of compound interest generate great enthusiasm among students as they realize the long-term benefits of saving $100 a month. As other districts prepare to add such lessons to their own required curricula, Funk encouraged them not to “think too much about it” and simply come up with a list of topics that will give high school graduates a solid financial foundation, no matter what academic or career path they choose.

“Whether you go into the trades, stay on the farm or ranch, or go to college, you have to have a budget, you have to pay rent, you have to buy groceries, and you have to insure your car and your house,” Funk said. “The strategies and curriculum we cover apply to all kids, no matter where they go.”