California high school graduates required to learn personal finance along with other essential skills

California high school students will soon delve into the realms of college grants and loans, discover the intricate workings of tax rates, understand the advantages of insurance, and learn how missing a credit card payment can lead to high interest rates blowing their budget.

This past week saw a swift legislative move to implement a mandate that would elevate California to become the 26th state insisting on a personal finance course as a requisite for high school graduation by the year 2030-31. Starting from the academic year 2026-27, every high school must make available a semester of personal finance education.

“It’s often the students who need financial literacy the most that receive it the least. Parents of low-income students are far less likely to be financially literate themselves, which means they can’t pass that knowledge down to their children,” shared Kayvon Banankhah, a high school junior from Modesto, expressing his views during a Senate Education Committee hearing regarding the bill on June 19. “I truly believe this bill is one of the most impactful and feasible ways we can combat wealth inequality in our state.”

Assembly Bill 2927 will have a far-reaching positive impact on future Californians according to Tim Ranzetta, a marketing and finance entrepreneur from Palo Alto who advocates for personal finance education. Ranzetta, as the co-founder of the nonprofit organization Next Gen Personal Finance that provides free personal finance curriculum and teacher training, backed a successful campaign to introduce a nearly identical personal finance initiative on California’s November ballot.

Ranzetta decided to withdraw his initiative from the ballot before the final changes deadline when Governor Newsom assured him of signing the bill.

The bill accommodates a significant change in response to concerns that increasing graduation requirements may further constrain students’ course options and schedules, particularly with the impending inclusion of ethnic studies as a requirement.

AB 2927 will allow students to opt for personal finance instead of economics, a standard semester-long graduation requirement typically taken alongside civics. Moreover, districts have the flexibility under the bill to substitute personal finance for another local graduation obligation. The alternative initiative would have introduced personal finance without replacing economics.

Average economics teachers showed support for personal finance, incorporating it into their courses to personalize economic concepts. However, they cautioned against compromising economics, predicting a potential decline in enrollment as a consequence.

Addressing this dilemma, Sen. Lola Smallwood-Cuevas, D-Los Angeles, expressed her conflicting views on the vital balance between individual financial literacy and understanding broader economic policies and their community impacts.

Assemblymember Kevin McCarty, D-Sacramento, likened the situation to adding more dishes to an already full Thanksgiving table, emphasizing the necessity to prioritize and ensure students could still undertake both economics and personal finance courses.

The economics teachers council indicated willingness to amend the economics course framework to incorporate more personal finance content to align with the new requirement. However, Ranzetta sought an independent personal finance offering as a condition to withdraw his initiative.

According to the bill, the Instruction Quality Commission will develop a curriculum guide and resources for a personal finance course by May 31, 2026, underlining essential topics to be covered.

• Fundamentals of personal banking, encompassing savings and checking accounts
• Budgeting for independent living
• Financing college and other career avenues
• Understanding taxes and their impact on net income
• Credit concepts, including credit scores and debt management
• Consumer protection skills like scam identification and identity theft prevention
• Charitable giving
• Principles of investment and wealth-building, covering pensions, IRAs, stocks, bonds, and mutual funds

“For many of my peers, investing in stocks might as well be as complicated and convoluted as rocket science or calculus in our case,” shared Banankhah, emphasizing the lack of education on financial topics in schools, depriving students of crucial knowledge.

The bill provides a grace period for several years to train teachers in the new curriculum, opening the opportunity for various credentials in social science, business, mathematics, or home economics to teach personal finance. Further, a supplementary authorization can be established by the Commission on Teacher Credentialing to facilitate course instruction.

The bill generated extensive support from the business community, State Superintendent Tony Thurmond, the Association of California School Administrators, and the youth activism group GENup. AB 2927 passed through the Legislature without opposition.

During a recent bill hearing, Sen. Dave Cortese, D-San Jose, highlighted the economic conditions leading to homelessness for roughly 15,000 high school graduates annually. Cortese emphasized the sudden impact of these conditions, stressing the significance of personal finance education in equipping students with essential survival tools.

“It almost seems like a high school student needs to be ready at any time to be fending for themselves these days,” he observed.