From in-school branches to new partnerships, how community banks are rewriting the script on financial education in schools.
By Walt WilliamsOnce a week, the students at Wayne Elementary School in Wayne, Nebraska, bring in allowance money and any other cash they’ve earned to deposit in what is essentially an FDIC-insured piggy bank. The Blue Devil Branch of State Nebraska Bank and Trust was launched three years ago to teach financial literacy basics. Students can’t withdraw their savings until they graduate from fifth grade, but they are awarded incentives such as bookmarks and school supplies for making deposits, and older students are trained as tellers so they can run the branch with only modest adult supervision.
“We define ourselves by community service,” Ley says. “My great-great-grandfather started [SN Bank] 130 years ago, so there has always been this big push of being part of your town.”
Filling a void in education
The Nebraska in-school savings program is one of a host of bank partnerships throughout the country teaching young people the importance of making sound financial decisions. They are offered at a time when the nation is facing a crisis in financial literacy, according to organizations that advocate for stronger financial education standards. The Council for Economic Education reports that fewer than a quarter of millennials demonstrate basic financial literacy, and that half of today’s youth will learn less about making sound financial decisions than their parents did. Only 25 states mandate financial education as a requirement for graduating from high school, with even fewer mandating a full semester on the subject.
Banks are stepping up to fill that void, often by working with schools and community organizations. The Nebraska in-school savings program began in 2002. Thirty-six schools across the state have formed partnerships with financial institutions to open student bank accounts and teach students the value of savings, according to Jennifer Davidson, president of the Nebraska Council of Economic Education. Participating banks open a single non-interest savings account for the school, with individual student savings tracked by spreadsheet. Older students receive teller training and participate in job interviews. Their work is monitored by a bank employee who travels to the school once a week to oversee the branch.
Initial research suggests the program is teaching students better financial habits. A study co-authored by Davidson found that more than 90 percent of high school students who participated in the Nebraska savings program while in elementary school had opened bank accounts, compared to roughly 60 percent of students who did not participate in the program. The study also found students who participated were more likely to regularly save money. While the program has no specific curriculum tied to it, bankers regularly talk to students about the importance of holding onto their earnings and setting goals.
“The idea is to just save—it doesn’t really matter what for,” Davidson says. “Then when you get your money at the end of fifth grade—when you get your accumulated savings—go buy whatever you wanted and take the rest and continue on. Go to the actual branch and deposit the rest and start your own sort of big kid’s savings.”
A needed resource
Financial education has been a priority for TS Bank of Treynor, Iowa, since at least 2009, when the bank launched the TS Institute to promote financial literacy in the states it serves. The institute works with schools and community organizations to provide free resources such as curriculum materials, simulators and after-school programs. The institute has two full-time staff members, with the program funded through the 10 percent of net income the bank has pledged to reinvest in its communities.
“At that time, there were no state standards in place—the ones for Iowa were not going to take place until 2012 and 2014,” says Traci Dresher, program manager at the TS Institute. “Historically, our company has little patience to wait, so we decided we were going to start our own.”
The TS Institute developed a K-12 curriculum that incorporates financial literacy in many courses students already take, according to Dresher. Second-grade students may be asked in art class to draw a savings plan and create a calendar for each month illustrating their goals. Eighth-grade students may be asked to write essays for English class on the stock market or mortgage rates. “We’re trying to weave [financial literacy]into everyday conversations that they could go home and take to the dinner table,” she says.
One problem the TS Institute discovered early on was many teachers lacked adequate resources to teach financial literacy, says Kyle Osborne, director of financial literacy at the institute. Part of the organization’s mission is to link teachers to those resources, such as lessons and materials produced by the ABA Foundation.
“What we found is that we could come alongside those schools and say here are 10 resources that you can use in your classroom,” Osborne says. “Here are some great resources like the ABA. We’d love to come into your classroom and run this program. And oh, by the way, if you need training, we can do that too.”
The importance of partners
The 2008 financial crisis and its effects on consumers convinced First Commonwealth Bank in Indiana, Pennsylvania, to take a more active role in promoting financial education. Anna Frank transitioned into the role of financial education program coordinator in 2010, where she now oversees a suite of financial literacy products aimed at students and adults. The bank has produced thousands of hours of financial education courses, with some lessons tailored to children as young as preschool.
“Whenever reaching out to any type of community organization that is working with kids, the great thing we can do is have a lot of stuff to choose from,” Frank says. “In the many years that I’ve been doing this, in all of our more than thousands of sessions, I’ve never had requests where we say have to say, ‘Sorry, we can’t talk about budgeting or saving or credit or whatever.’ When do get a request, if it’s outside of the lessons that are already developed for us, the benefit of having a financial education coordinator is I have the time and capacity to custom create sessions.”
More recently, First Commonwealth has reached out to more city schools after the bank’s diversity and inclusion officer noted that much of its earlier education efforts were concentrated in rural and small-town schools, largely because that is where most requests for resources came from. “We are trying to do it a bit more strategically, where I get involved in terms of going to knock on the doors if we are looking at communities that underserved,” Franks says.
Roughly a third of the 350 financial education courses that Mercantile Bank of Grand Rapids, Michigan, produces every year are targeted at youth, says Sonali Allen, chief compliance and community development officer at the bank. A smaller bank, Mercantile’s education efforts are overseen by its compliance division. Most of the bank’s youth offerings use ABA’s Get Smart About Credit and Teach Children to Save curricula, with bank staff volunteering to teach the courses or nonprofit partners providing the instructors.
“I have one dedicated employee that handles all of our partnerships with all the nonprofits,” Allen said. “On a quarterly basis, (we are) reaching out to every single nonprofit, finding out what their class schedule and running volunteers internally. It is like a volunteer program that any nonprofit would run. And we also donate to the nonprofit to support that program.”
Sometimes those programs bring in as little as two people and nonprofits will apologize for the lack of turnout, says Allen, who views the apologies as unnecessary. “If you impact one person out of 30 and that’s all you impact, it’s still an impact,” she says. “It still helps people significantly.”
What banks can offer
Bank financial literacy programs can be helpful if careful thought is put into how they’re delivered, says Nan Morrison, CEO of the Council for Economic Education. For instance, it may be tempting to develop an app or website with financial resources, but young people get most of their financial advice from family and friends, she says. Only a classroom setting provides a structured environment where students can be walked through the steps of sound financial management.
Morrison said one route banks could take is to sponsor professional development opportunities for teachers, such as by providing scholarships to a financial literacy conference. They can also volunteer staff to talk to students. Her group sponsors family literacy nights in which younger students, their parents and teachers gather at school after hours to learn financial basics.
“It doesn’t require a huge amount of prep . . . the kids are younger, so [volunteers]are not going to get really hard questions about some investment thing they might not know about,” she says. “It’s also a great way for a community to see that the people who are working in finance care about engaging students and families.”
Banks should gauge the environment before making a jump into financial literacy education, says Billy Hensley, CEO of the National Endowment for Financial Education. Don’t assume someone is not already doing thoughtful financial education in your community. If they are, instead look at how you can support them, he suggests.
“Go into it with humility and ask how you can be helpful as a financial institution as a volunteer, as a potential funder, as a program provider, as a resource provider, and so forth,” he says. “Sometimes it is important for us to ask people what they need instead of making assumptions. And I think you will go a long way in your community by asking people what they need, and even going in and asking students, ‘What do you want to know about?’”
Photo courtesy of SN Bank.