Obama Administration Challenges Students, Teachers and Parents to Tackle Financial Literacy
Exam Now Open to High School-Aged Students Across the Nation, Runs through April 13
High school-aged students from across the country can test their knowledge about personal finance through the National Financial Capability Challenge and earn a chance to be recognized by the Obama Administration. The annual Challenge enhances students' financial capability by strengthening their understanding of saving, budgeting and investing, among other central personal financial concepts. The voluntary online exam is available to students now through April 13.
"The Challenge is an exciting way to educate students on basic finance and encourage them to make smart money management part of their everyday behavior," said Deputy Secretary of the Treasury Neal S. Wolin. "It is critically important that young people learn how to succeed financially, and I commend educators and parents across the country for taking the time to teach these valuable skills."
"So many of the challenges we face today, both individually and as a nation, are because we have not taught these basic lessons about managing finances and making smart investments," said U.S. Secretary of Education Arne Duncan. "The Challenge is an excellent tool for educators to help them teach these key skills so every student is receiving a well-rounded education and is prepared to make sound financial decisions, even from a young age."
The U.S. Department of the Treasury, in conjunction with the U.S. Department of Education, has developed an Educator Toolkit, which can be accessed on Challenge.Treas.gov, to help prepare students for the exam. From saving for college to managing expenses like cell phones, the Challenge helps students to learn about a wide array of topics that together constitute a basic understanding of personal finance.
Treasury and Education encourage all educators working with U.S. high school-aged students (ages 13-19) to register for the Challenge, download the Educator Toolkit, prepare their students, and administer the online exam. Educators can offer the Challenge in libraries, after-school settings, and in home-school environments as well as in the classroom. Department of Defense schools overseas are also encouraged to participate.
All students who finish first or second at their school or place in the top 20 percent nationwide will receive official award certificates, and top students will be recognized on the Challenge website. Education foundations, state and local officials are also encouraged to recognize top scoring students, as some have already committed to do.
Some examples of the types of questions students will answer during the exam are as follows:
- Which one of the following best describes the relationship between the interest rate charged to a person for a loan and that person's risk of nonpayment of the loan?
- Lower interest rates are charged on loans with a lower risk of nonpayment.
- Higher interest rates are charged on loans with a lower risk of nonpayment.
- Lower interest rates are charged on loans with a higher risk of nonpayment.
- I don't know.
- John drove his car to the local Gas and Shop store. On the way to the store he got distracted while talking to his friend in the car and hit a street sign. Neither he nor his friend was hurt in the accident, but the front end of the car was damaged. What type of automobile insurance coverage will provide reimbursement for damages to his car?
- I don't know
More than 84,000 students and 2,500 educators from 1,692 schools in all 50 states participated in the 2011 Challenge. On average it took students less than 30 minutes to complete the Challenge last year. To learn more about the Challenge or to register for this year, educators should visit Challenge.Treas.gov.