Teaching Standards and Learning Targets

Credit is an essential component of financial education yet too often the classroom lessons stop at spending, budgeting and saving. The Practical Living content includes consumerism-where financial topics are detailed. The CARE content is stipulated in national and Kentucky standards, as you will see below.  

Kentucky high schools are required to document how they cover the content in consumerism through a Practical Living Program report. Since few high schools have Practical Living educators, this instruction falls primarily to math, business and economics teachers. Certainly the financial decision making, prioritizing goals and long-term planning cut across other instructional disciplines.

Below you’ll find the national standards for financial literacy. Use these standards to guide your classroom instruction. If you’d like, you can request a CARE presenter come to your classroom.

National Standards for Financial Literacy from the Council for Economic Education

Students will understand that:  Credit allows people to purchase goods and services that they can use today and pay for those goods and services in the future with interest.  People choose among different credit options that have different costs.  Lenders approve or deny applications for loans based on an evaluation of the borrower’s past credit history and expected ability to pay in the future.  Higher-risk borrowers are charged higher interest rates; lower-risk borrowers are charged lower interest rates.

Concept progression

At the 12th grade level, the focus is on credit reports, credit scores, behaviors that contribute to strong credit reports and scores, and the impact of credit reports and scores on consumers.  Consumer protection laws as they apply to credit and credit card use are also covered.

In Kentucky High Schools

Credit education is a component of the Practical Living content area.  The subdomain of Consumerism contains credit content and is included in the high schools’ Program Review audit.  The pertinent Program Review statements embedded in PL-HS-3.1.3 are:

  1. Students will learn authentic, real-world opportunities to engage in financial decision-making.
  2. Students will learn about problem-solving and critical thinking regarding money management, financial planning, savings, investments and consumer credit within and beyond the classroom.
    1. Identify the costs and benefits of various types of credit.
    2. Explain the purpose of a credit report and identify borrowers’ credit report rights.
    3. Describe ways to avoid or correct debt problems.
    4. Summarize major consumer credit laws.

Learning Targets for High School Students

Costs and benefits of credit

  • I can explain how debit cards differ from credit cards
  • I can explain how interest rates and loan length effect the cost of credit
  • I can define all required credit card disclosure terms and complete a typical credit card application
  • I can use a financial or online calculator to determine the total cost of repaying a loan under various rates of interest and over different periods of time
  • I can apply systematic decision making to identify the most cost-effective option for purchasing a car
  • I can identify various types of student loans and alternatives to loans as a means of paying for post-secondary education

Credit reports and scores

  • I can describe the elements of a credit score
  • I can explain the factors that improve a credit score
  • I can explain how a credit score effects creditworthiness and the cost of credit
  • I can analyze the information contained in a credit report, indicate the time that certain negative data can be retained, and describe how to dispute inaccurate entries on a credit report
  • I can discuss ways that a negative credit report can affect a consumer’s financial future

Avoid credit problems

  • I can identify possible indicators of excessive debt
  • I can describe possible consequences of excessive debt
  • I can list actions that a consumer could take to reduce or better manage excessive debt
  • I can describe the purpose of bankruptcy and its possible effects on assets, employability, and credit cost and availability

Consumer credit laws

  • I can summarize consumer credit laws and the protections that they provide
  • I can research online and printed sources of up-to-date information about credit rights

Conversations with High School Students

  1. What is credit?
  2. List and explain one positive and one negative aspect of credit use.
  3. What is the cost of using credit?
  4. What are some things you can do if you are experiencing a credit crisis?
  5. Describe what it means to “go bankrupt”.
  6. What are the differences between Chapter 7 and Chapter 13 bankruptcies?
  7. How does bankruptcy affect your credit rating?

Resources:

  • Kentucky Bar Foundation –  Credit Abuse Resistance Education Program for Kentucky high schools www.careinky.org 1-800-874-6582
  • Kentucky Council on Economic Education (www.econ.org)  or call 1-800- I DO ECON.  Source for Financial Fitness for Life curriculum, teacher professional development through regional university-based Centers for Economic Education
  • Federal Reserve Bank of St. Louis, Louisville Branch Source for High School Finance curriculum- Cards, Cars and Currency (www.stlouisfed.org/education_resources)
  • Kentucky Department of Financial Institutions
  • Kentucky JumpStart Coalition – A collaborative serving all Kentuckians with financial information.
  • Federal Reserve Bank of Philadelphia -Keys to Financial Success  Semester Course – Offered free of charge to schools and teachers.  With free professional development and no textbooks to buy, Keys to Financial Success represents an excellent option for getting teachers and students started with personal financial education.   www.philadelphiafed.org/education or call Todd Zartman todd.zartman@phil.frb.org) Economic Education Specialist at  (215) 574-6457