Money management target of Maine law Grants to fund students’ financial literacy

AUGUSTA – Lawmakers say Mainers – especially younger people who get easy access to credit cards – need better money-management skills. And they’re putting up money to see that more financial advice will be offered.

The Legislature has enacted a bill to create a Council on Financial Literacy, which will support programs that educate Maine residents about money management. It also provides up to $50,000 for matching grants to fund those programs.

Rep. Marilyn Canavan, who sponsored the bill, said it will help ensure that Maine students learn financial responsibility in an era of increasingly unmanageable debt brought on by easy access to credit cards. The bill was signed into law June 27.

The Waterville Democrat said the average monthly credit card balance of an undergraduate student is $2,237. By the time students graduate from college, they have average debts of $20,402 in combined education loan and credit card balances, said Canavan, citing National Conference of State Legislatures figures.

“Financial literacy is not just about managing money,” Canavan said. “It’s about making good, informed financial decisions.”

While the state insists that young people receive driver education before they can get on the road, “we haven’t been nearly as zealous in insisting that they learn to responsibly maneuver the byways of personal finance,” said Canavan.

As a result, many young people experience financial disaster, and without education many more will.

The NCSL, a nonpartisan research organization, said that by the end of 2004, finance standards or guidelines were part of education standards in 38 states. Seven states required that a personal finance course be taken in order to graduate, and nine states tested students for personal finance knowledge.

State Treasurer David Lemoine will chair the council and administer the financial literacy program grants, and Will Lund, director of the state’s Office of Consumer Credit Regulation, will serve as a standing member. A Maine high school student and a Maine college student also will serve on the council.

“This bill is a cost-effective investment toward the important goal of helping consumers to help themselves,” said Lund.