SB 22-FINANCIAL LITERACY PROGRAM IN SCHOOLS  4:13:40 PM CHAIR TOBIN reconvened the meeting and announced the consideration of SENATE BILL NO. 22 "An Act establishing a financial literacy education program for public schools; and providing for an effective date." 4:14:03 PM SENATOR BILL WIELECHOWSKI, District K, Alaska State Legislature, Juneau, Alaska, Sponsor of SB 22. He stated that SB 22 was introduced in the previous session, passed the committee, but failed to advance due to late timing. He explained that the bill's core goal is to ensure high school students receive financial literacy education, including skills like balancing a checkbook, setting up a retirement plan, and applying for financial aid. He noted that Alaska has the lowest financial aid application rate in the country and emphasized the importance of equipping students with foundational financial knowledge. He described how initial proposals for a standalone course were revised, based on feedback from school districts and the committee, to integrate financial literacy into existing subjects like math and economics. He acknowledged concerns from educators about added mandates but argued that this is a minimal requirement with broad flexibility, similar in importance to civics. 4:16:43 PM HUNTER LOTTSFELDT, Staff, Senator Bill Wielechowski, Alaska State Legislature, Juneau, Alaska, Offered a presentation and sectional analysis on SB 22. He moved to slide 2 and paraphrased What is Financial Literacy, adding that it is also important for Alaska's students to know how to apply for financial aid: [Original punctuation provided.] What is Financial Literacy  • Understanding how much you earn and spend • Responsibly managing and paying off debt • Building assets to achieve personal goals • Preparing for financial security later in life 4:17:20 PM MR. LOTTSFELDT moved to slide 3, Why Do We Need Financial Literacy, and shared the following points: [Original punctuation provided.] Why Do We Need Financial Literacy?  • Only third of Americans can comfortably cover a $400 emergency • Average credit card debt in Alaska: $8,026 • Average student loan debt in Alaska: $35,821 (2k increase) • Alaska received an "F" grade in teaching financial literacy 4:18:01 PM MR. LOTTSFELDT moved to slide 4, SB 22: [Original punctuation provided.] Senate Bill 22    • Adds a 0.5 credit in financial literacy • Course should cover topics including: • Making a budget • Avoiding fraud and financial deception • Basic principles of retirement accounts • Postsecondary financial aid and scholarships 4 4:18:22 PM MR. LOTTSFELDT moved to slide 5, List of Topics, and said essential SB 22 is trying to build a base for personal finance as students graduate from public school: [Original punctuation provided.] List of Topics  • (1) different types of financial institutions and opening and managing an account with a financial institution; • (2) making a budget; • (3) basic principles of money management, including spending, credit, credit scores, and; managing retail debt, credit card debt, and other types of debt • (4) basic principles of completing a loan application; • (5) basic principles of personal insurance policies; • (6) basic computation of federal income taxes; • (7) avoiding fraud, financial deception, and predatory lending practices; • (8) simple contracts; • (9) contesting an incorrect billing statement; • (10) computing interest rates by various mechanisms; (11) types of savings and investments; • (12) basic principles of retirement accounts; • (13) receiving an inheritance and related financial implications; • (14) postsecondary financial aid and scholarships; and • (15) financial implications of being a member or a beneficiary of a Native corporation established under 43 U.S.C. 1601 et seq. (Alaska Native Claims Settlement Act) or a similar entity, including payment of dividends and issuance of shares. 4:18:40 PM MR. LOTTSFELDT provided the sectional analysis for SB 22: [Original punctuation provided.] SB 22  Sectional Analysis   Section 1. AS 14.30 relating to public schools, adds a new section a. Directing school districts to establish and provide a financial literacy education program, equivalent to a half credit, for students in grades nine through 12 that will be approved by the Department of Education& Early Development. And topics covered their- in. b. Creates an exemption to this graduation requirement for transfer students who cannot reasonable complete the course work. c. Provides definitions. Section 2. Provides an applicability date of January 1, 2027, for the first graduating class that will need to meet this requirement. Section 3. Provides an effective date for the bill of July 1, 2026. MR. LOTTSFELDT said that if a student transfers from out-of-state to a school in Alaska after 10th grade the student does not need to fulfill the half credit requirement. 4:19:34 PM SENATOR STEVENS asked whether the Free Application for Federal Student Aid (FAFSA) is included in SB 22, noting that many students appear lost when trying to complete the form, which is required for scholarship eligibility. 4:19:55 PM MR. LOTTSFELDT stated that SB 22 addresses both FAFSA and the Alaska Performance Scholarship. He shared his concern over Alaska's FAFSA completion rate, noting it dropped from 16 percent last year to 13.7 percent as of January 31. He added that the rate was as low as 11.9 percent just two weeks earlier and expressed hope it would improve by the end of the school year. He emphasized that the consistently low rates remain a significant concern. 4:20:36 PM SENATOR CRONK stated support for SB 22 but sought clarification, asking whether it mandates that every student must complete financial literacy education as a graduation requirement beginning after 2027. 4:20:49 PM SENATOR WIELECHOWSKI replied that SB 22 does mandate students complete financial literacy education. SENATOR STEVENS addressed concern about the use of the term unfunded mandates and said the state provides over a billion dollars to education. He asserted that certain priorities, like financial literacy, must be addressed. He maintained that districts should be able to allocate time and resources within existing funding to teach this content. 4:21:25 PM CHAIR TOBIN asked for clarification on language in SB 22, page two, lines three and four, specifically the phrase "the program must include, to the maximum extent practicable, discussion of or instruction on..." She requested an explanation of what that language might mean in practical terms for a school, especially in the context of concerns about unfunded mandates. SENATOR WIELECHOWSKI explained that the phrase "to the maximum extent practicable" was language added by the committee last year to provide flexibility. He stated that if a school districtsuch as one in a rural areacannot reasonably implement the requirement, then meeting the standard of practicability would relieve them of the obligation. He emphasized that the bill requires the Department of Education and Early Development to make a list of approved open educational resources available to districts, as noted on page one, lines eight and nine. He added that many credible online financial literacy curricula exist, and some districts, like Anchorage, have already successfully integrated them. He noted that the provision serves as a pressure relief valve for districts unable to meet the requirement. 4:23:16 PM CHAIR TOBIN stated that changes intended to simplify the Free Application for Federal Student Aid (FAFSA) process have instead contributed to low completion rates. She expressed hope that those rates will improve. She shared her experience attending the State Higher Education Executive Organization's annual convening, where the Alaska Commission on Postsecondary Education (ACPE) and others emphasized the importance of financial literacy in high school. She noted that students are often taking on significant debt without fully understanding the long-term financial impact and that parents may be unable to guide them. She expressed support for the legislation, highlighting the state's responsibility to prepare students for financial success. 4:24:17 PM SENATOR KIEHL emphasized that students cannot complete the FAFSA on their own because they need their parents' tax information. 4:24:37 PM SENATOR WIELECHOWSKI confirmed Senator Kiehl's statement. 4:25:13 PM KELLY MANNING, Deputy Director, Division of Innovation and Education Excellence, Department of Education and Early Child Development, Juneau, Alaska, reviewed the fiscal note for SB 22. She stated that the fiscal note for SB 22 was based on the requirement that DEED maintain a list of approved open educational resources that align with the bill. She explained that the department would convene a committee of 20 educators, compensated through stipends, to develop a rubric for evaluating these resources. The committee would align the bill's requirements with existing education standards and use the rubric to assess and compile a vetted list of materials. She added that the fiscal note also includes funding for a financial literacy expert to support the process and covers fees related to necessary regulation changes. SENATOR STEVENS SENATOR STEVENS asked for an explanation of "existing open resources." 4:26:56 PM MS. MANNING explained that while some financial literacy curricula come with costs and must be purchased by districts, others are free open educational resources. These free resources are often developed through federally funded grants or by educational nonprofit organizations and are publicly available for use. She stated that the department would typically issue a Request for Information (RFI) to identify potential partners offering relevant materials. The department would then research what is currently available and in use by other states or districts, and compile those resources for evaluation based on quality and alignment with educational standards. 4:27:59 PM SENATOR CRONK asked whether using a stipend is a common past practice. He also inquired about the amount of the stipend per person and the expected timeframe for the educators' work. 4:28:17 PM MS. MANNING explained that the stipend is intended for Alaska educators who participate in the committee process. She stated that each educator would receive $1,500, based on the estimated time required to review standards, develop a rubric, and evaluate materials. She noted that the work would take place over several months and emphasized that since these educators are already balancing district responsibilities, the stipend both encourages participation and recognizes the additional commitment and work involved. 4:29:38 PM SENATOR WIELECHOWSKI stated that SB 22 has broad support from various organizations, including the Alaska Chamber of Commerce, the Anchorage School District, the Rural Alaska Community Action Program Inc. (RurAL CAP), Alaska Credit Union League, and others. He thanked the committee for their time and consideration. 4:30:01 PM CHAIR TOBIN held SB 22 in committee.