Financial literacy. The coalition, its founders and its funders

A phrase that did not exist

"Financial literacy" is a new phrase. In printed books it is effectively absent until the 1990s, first becomes common in 2002, and is still rising.¹ It arrived with a movement, and the movement has founders.

December 1995

The idea for a national coalition to teach personal finance in schools is credited to William E. Odom, chairman and chief executive of Ford Motor Credit, the car maker's lending arm. The first meeting was organized by H. Randy Lively, president of the American Financial Services Association, the trade body of the consumer-credit industry, whose history began in 1916 as the small-loan lenders' association. It met in Reston, Virginia, on 1 and 2 December 1995, to plan "curriculum modules for personal finance education in the nation's schools".² It became the Jump$tart Coalition in 1997, and now has more than a hundred partner organizations, funded by their dues and by program sponsors.²

So the financial-literacy movement was conceived by an auto lender and convened by the lenders' trade association, seventy-nine years after that association formed to "dignify" the small-loan business.

The test and who paid for it

The coalition's own test of high-school seniors scored 57.3 percent in its first year, 1997 to 1998, which its author called "a high flunk". It fell to 48.3 percent by 2008. The 2008 report thanks "the Merrill Lynch Foundation for underwriting the cost of the study".³

The standards and who paid for them

The national standards that tell schools what to teach have two editions, and each acknowledges one funder. The 2013 National Standards for Financial Literacy, from the Council for Economic Education, thank 1st Financial Bank USA "for its support of this project". That bank "specializes in providing quality credit card and financial services to college students".⁴ The 2021 National Standards for Personal Financial Education, issued jointly with the coalition, thank the Jackson Charitable Foundation, the giving arm of Jackson National Life, an annuity insurer.⁴ The council's current donor roll lists Visa at the top tier, with fund managers, banks, card networks and a trading app below.⁴

The standards are not bad. The 2021 edition asks twelfth-graders to compare fund expense ratios and to know why active funds cost more than index funds.⁴ What neither edition contains is the phrase "conflict of interest", the word "fiduciary", any payout ratio, or any markup.⁴

The state mandates

As of April 2026, thirty states require a standalone personal-finance course for high-school graduation; Utah was first, in the mid-2000s, and Delaware the thirtieth, in October 2025.⁵ Take the two largest states. Texas requires students to examine the cost of borrowing including the annual percentage rate. Florida's thirteen required topics run from opening a bank account and balancing a checkbook to computing interest rates. Neither names a fee, a commission, an adviser or a conflict.⁶

Does it work

Two large studies pool the evidence, and they disagree. A 2014 analysis of 201 studies found that financial education explained "only 0.1% of the variance in financial behaviors", with effects that faded to nothing within twenty months; it was funded by the one foundation in this field that refuses corporate money.⁷ A 2022 analysis of 76 randomised trials found a small-to-moderate effect, about a tenth of a standard deviation, "at least three times as large" as the earlier work; it was funded by the German Research Foundation.⁸ They disagree on size, not on sign. Both are real. Quote both, with their funders.

The shape, again

The literacy movement is the field's latest founding, and it has the same shape as the first. The lenders convened it. The card issuers and insurers paid for its standards. The tests measure whether the student can do the arithmetic of compound interest. None of it measures what the lender keeps. A student who passes the course knows how to compute an annual percentage rate. The course does not ask what that rate contains.