SB 99-FINANCIAL LITERACY COURSE IN SCHOOLS  3:31:49 PM CHAIR TOBIN announced the consideration of SENATE BILL NO. 99 "An Act establishing a financial literacy education course for public schools; and providing for an effective date." 3:32:05 PM SENATOR BILL WIELECHOWSKI, District K, Alaska State Legislature, Juneau, Alaska, provided the following statement as the sponsor of SB 99: [Original punctuation provided.] Senate Bill 99  Financial Literacy Curriculum  Sponsor Statement Senate Bill 99 will give Alaskan students important life skills they will use throughout the rest of their lives by requiring school districts to offer financial literacy curriculum for high school students. Teaching financial literacy will equip students with the knowledge they need to avoid common financial pitfalls and manage their money successfully. This course will teach the ability to understand and manage personal finances, including topics such as budgeting, investing, managing debt, and avoiding scams and fraud. It will also help students access post- secondary education opportunities in the most costeffective way by teaching about the Alaska Performance Scholarship and how to apply for financial aid. Giving students a well-rounded financial literacy education will help Alaskans save, avoid debt, and improve the Alaskan economy. It will also help reduce reliance on social programs funded and administered by the state. Increasing consumer debt can significantly harm our overall economy and is associated with lower GDP growth, higher unemployment, and greater likelihood of a future banking crisis. It is easy for young adults to fall into the trap of predatory lending or to agree to interest rates or loan terms they do not understand. Alaska leads the nation in credit card debt at $8,026 per person. The average US household owes $17,000 in credit card debt and $56,000 in student loans. Fifty-five percent of Americans have less than $1,000 in a savings account and the median retirement savings is only $60,000 for all families in America. This bill will arm young Alaskans with the knowledge they need to use credit and other financial tools responsibly before they sign up for a loan or open a new credit card. SB 99 gives school districts the flexibility to choose how to incorporate the financial literacy course into their elective curriculum requirements. Twenty-two states already have a similar financial literacy requirement, and many more school districts offer similar curriculum. This bill will take effect for the 2024-2025 school year, giving districts over a year to develop a curriculum that meets the needs of their students. Passing SB 99 will help students become financially responsible adults, leading to greater stability and security in their lives, and improving our state. 3:34:16 PM KAILI SPENCER, Staff, Senator Bill Wielechowski, Alaska State Legislature, Juneau, Alaska, and began the presentation by saying financial literacy is making sure individuals have the skills and knowledge to make informed and effective decisions about their finances. She spoke to the following points on slide 2: [Original punctuation provided.] What is Financial Literacy?   ? Understand how much you earn and spend ? Repay and avoid debt ? Build assets and achieve personal goals ? Achieve financial security later in life 3:35:49 PM MS. SPENCER turned to slide 3 and spoke to the following: Why do we need Financial Literacy? ? Only ? of Americans can comfortably cover a $400 emergency ? Average credit card debt in Alaska: $8,026 ? Average student loan debt in Alaska: $34,024 ? F rating for financial literacy education MS. SPENCER said Alaska is number one in the nation for credit card debt. 3:36:50 PM MS. SPENCER turned to slide 4 and provided more details on the following content of SB 99: [Original punctuation provided.] SENATE BILL 99 ? 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 3:38:01 PM CHAIR TOBIN asked how much time it would take to complete 0.5 credits. MS. SPENCER replied that it would be 1-semester credit or half of a school year. 3:38:19 PM MS. SPENCER moved to slide 5 and stated there is broad support for SB 99: [Original punctuation provided.] Support for Senate Bill 99  ? Margo Bellamy, ASD School Board President ? Matt Hunter, Teacher (17 years) ? Leola Rutherford, Concerned Parent, Educator, & 5th Generation Alaskan ? George L Stewart, Parent ? Nava A. Stephenson, Student ? Maria Nafzger, Student ? Harper Landry, Student ? Kelly Lessens, Anchorage School Board Treasurer and Finance Chair ? Nonie Mucha, Student ? Madeleine Ashour, ExcelinEd in Action 3:38:50 PM SENATOR KIEHL opined that financial literacy is a needed curriculum. He asked whether the 0.5 credit would be part of the 21 credit hours required statewide for a student to graduate or if SB 99 makes the graduation requirement 21.5 credits. MS. SPENCER said the state does not have a financial literacy requirement. She stated her belief that SB 99 would make the graduation requirement 21.5 credits. There are school districts that already exceed the 21-credit requirement. For example, the Anchorage School District requires 22.5 credits to graduate, and Haines already offers financial literacy and requires 24.5 credits. 3:39:50 PM SENATOR STEVENS stated concern that only 16 percent of students have applied for the Free Application for Federal Student Aid (FAFSA). He opined that every person should apply so they realize there are options available for college and career training. He opined it would be good if the class required students to complete the FAFSA. 3:40:26 PM SENATOR GRAY-JACKSON said the statistics were alarming. As a co- sponsor, she looks forward to SB 99 moving forward. 3:40:51 PM MS. SPENCER offered the following sectional analysis for SB 99: [Original punctuation provided.] Senate Bill 99  Sectional Analysis Section 1. AS 14.30 relating to public schools, adds a new section a. directing school districts to establish and provide a half credit financial literacy education course for students in grades nine through 12 that will be approved by the Department of Education & Early Development. b. provides a list of topics to be covered in the course. Section 2. Provides an applicability date for the first graduating class that will need to meet this requirement. Section 3. Provides an effective date for the bill of July 1, 2025. CHAIR TOBIN stated that from discussions about SB 99 she suggests the following: • SB 99 should require discussion on Alaska Native Corporations dividends and shares, as well as other entities. • Expand account discussions to include credit union accounts. • Include discussions on predatory lending practices, a topic that receives a lot of attention and advocacy currently. 3:42:30 PM SENATOR BJORKMAN joined the meeting. 3:42:39 PM MS. SPENCER stated that Ms. Rutherford is a Girdwood teacher certified to teach the Next Gen Personal Finance (NGPF) curriculum to other teachers. 3:43:20 PM LEOLA RUTHERFORD, Teacher, Girdwood School, Girdwood, Alaska, said she is a concerned parent, 6th-grade teacher, and 5th Generation Alaskan. She stated that financial literacy is an equity access issue. It is commendable that Anchorage, Glenallen, and Haines teach financial literacy, but the opportunity must be available to all Alaskan students. Alaska ranks 46th in the nation for financial literacy. Eighty-eight percent of parents and 76 percent of high school students agree that financial literacy education is needed. However, less than 2 percent of high schools offer it as guaranteed access for graduation. She said she supports SB 99 because it is rigorous and meets the national jumpstart standards for financial literacy. Through SB 99, the financial literacy curriculum would prepare students to take an optional nationally recognized certification test called W!se Financial Literacy. Students could put this certification on resumes and college applications. SB 99 also offers flexibility in how 0.5 credit is acquired. School districts could embed the curriculum in social studies, math, or as an elective. She noted that ensuring the course is not a barrier to graduation is important. SB 99 allows flexibility by allowing schools to decide how financial literacy fits into their curriculum. She named a few free online curriculums and professional development courses that schools can utilize. The financial literacy credit is also available through AK Grad, a self-paced credit recovery and advancement program. There is a $75 course fee, but grants and scholarships are available. 3:47:52 PM SENATOR BJORKMAN said several options were mentioned by which students could achieve the new requirement that would not add additional funding to school districts' budgets. He said that in the school where he taught, students earn three social study credits by taking Alaska History (0.5 credits), World History (1.0 credits), U.S. History (1.0 credits), and U.S. Government (0.5 credits). He asked which class students should not take so they can take financial literacy. MS. RUTHERFORD replied that it is not an either-or choice, making SB 99 ideal legislation. School districts could add financial literacy to student's elective or math requirements for graduation. School districts can maintain the rigor of other curriculums and still implement financial literacy. 3:48:59 PM SENATOR BJORKMAN asked whether any entity had assessed the additional cost to school districts to offer an additional 0.5 credit course as a math or other elective. 3:49:21 PM MS. SPENCER stated that a portion of the fiscal note attached to SB 99 addresses giving stipends to teachers that instruct other teachers on how to teach the curriculum. DEED has not assessed the impact on individual school districts. 3:49:42 PM MS. RUTHERFORD said there are programs that districts can purchase; however, increasing financial literacy is a nationwide grassroots, bi-partisan effort, so free support and curriculums are available, such as Junior Achievement or Next Gen Personal Finance. 3:50:05 PM SENATOR WIELECHOWSKI said the Anchorage School District supports teaching financial literacy. He opined that there would be tremendous benefit to teaching financial literacy within applied math for real-world exposure. It would make learning the subject more enjoyable for students. 3:50:43 PM SENATOR KIEHL said he thought the fiscal note supported the development of a rubric to approve courses rather than curriculum purchasing. He asked whether free and district- developed or purchased courses would meet the rubric's requirements. 3:51:33 PM DEBORAH RIDDLE, Operations Manager, Division of Innovation and Education Excellence, Department of Education and Early Development (DEED), Juneau, Alaska, said the fiscal note states 20 educators would create a rubric to help school districts by evaluating available courses and curriculums that the department gathers. The rubric is developed based on content and availability of free resources and hybrid programs to meet the needs and wants of school districts. The rubric sets the tone for curriculum content since no standards exist. Each school district chooses its curriculum. 3:53:06 PM SENATOR BJORKMAN stated that the issue was not about selecting a curriculum or finding materials but rather about utilizing staff resources that schools already use to teach other courses. He pointed out that adding a new mandatory course for graduation essentially created a zero-sum game, where schools must sacrifice existing activities to accommodate the new requirement. Based on his experience as a teacher for 14 years, he argued that it is not feasible for teachers to take on additional responsibilities continuously. He acknowledged the importance of financial literacy but suggested that school districts should offer it as an elective rather than a requirement. He highlighted that making it a requirement would significantly impact a school's budget and affect the availability of other elective programs such as art, band, or drafting. He cautioned against adding more requirements and mandates, particularly when Alaska faces significant education funding shortfalls amidst inflation, with no foreseeable plans to address the gap. 3:55:02 PM SENATOR KIEHL opined that the applicability section is a relatively quick implementation. Students finishing their freshmen year in 2023 must complete a financial literacy course by the time they graduate high school. He asked about the timing and stated that some students plan their coursework before entering high school. MS. SPENCER replied that the department selected the dates without thinking the deadline would be considered rushed. SENATOR WIELECHOWSKI said it was a policy call. America is a capitalist society, and people must understand how to manage money, so they do not live destitute. He opined that people in the US are on the precipice of a cliff, with excessive debt and limited savings. Children need to learn about managing finances. He understands Senator Bjorkman's point regarding incorporating financial literacy into the classroom, but SB 99 allows schools to handle the requirement in a way most suited to their programmatic schedule. 3:57:35 PM SENATOR STEVENS said financial literacy is crucial. He perused the list of topics the financial literacy course would cover and agreed that students must be aware of the financial issues they will encounter, so he supports SB 99. 3:58:19 PM CHAIR TOBIN said the committee would discuss the fiscal notes for SB 99. 3:58:34 PM MS. RIDDLE said the fiscal note for SB 99 contains three one- time expenses totaling $71,000: [Original punctuation provided.] 1) $30.0 for stipends ($1.5 each) for 20 educators and community stakeholders for participation in the development of a rubric to evaluate courses, and to complete the review based on the developed rubric; 2) $35.0 to contract an education expert to facilitate the development of a rubric and evaluation of courses; and, 3) $6.0 for legal fees to implement the necessary regulation changes. 3:59:32 PM CHAIR TOBIN held SB 99 in committee.