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1 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Financial Education & Account Access Among Elementary Students April 23, 2014 Brought.

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Presentation on theme: "1 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Financial Education & Account Access Among Elementary Students April 23, 2014 Brought."— Presentation transcript:

1 1 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Financial Education & Account Access Among Elementary Students April 23, 2014 Brought to you by CFED and the Center for Financial Security at the University of Wisconsin-Madison

2 2 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS 2 Our Presenters Louisa Quittman Director, Financial Education Office of Consumer Policy US Department of the Treasury Kasey Wiedrich Senior Research Manager CFED Laura Rosen OpportunityTexas Coordinator Center for Public Policy Priorities Jennifer McHugh Community Relations Manager Royal Credit Union Elizabeth Odders-White Associate Professor Wisconsin School of Business CFS Affiliate

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4 4 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Study aims to better understand how to provide children with the financial skills to become economically successful Focus on elementary-age students Rigorous examination of financial education combined with financial access

5 5 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Financial Education + In-School Banking Eau Claire, Wisconsin Population, 2010: 65,883 Median household income, : $42,226 Unbanked Households, 2009: 5.4% Economically Disadvantaged Students, : 41% Amarillo, Texas Population, 2010: 190,695 Median household income, : $44,769 Unbanked Households, 2009: 10.3% Economically Disadvantaged Students, : 69% 5

6 6 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Partners U.S. Treasury Department, Office of Consumer Policy CFED Center for Financial Security, University of Wisconsin- Madison Implementation Partners Eau Claire Eau Claire Area School District Royal Credit Union Amarillo Opportunity Texas Texas Council for Economic Education Amarillo Independent School District Happy State Bank 6

7 7 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Research Questions What is the impact of financial education and in- school account access, alone and in combination, on students: – Financial Knowledge – Attitudes towards savings and financial institutions – Behavior, e.g. opening and using bank accounts 7

8 8 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Financial Education 5 or 6 lessons from Financial Fitness for Life curriculum Content focused on Savings Account Use – Defining income, expenses and savings – Wants vs. needs, incentives and goals – Explain budgets and savings plans – Compare savings options and understanding interest 45-minute lessons taught by classroom teachers – Teachers trained for 3 to 8 hours on curriculum and materials

9 9 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS 1 st Year in 4 th & 5 th Grade Classrooms – Eau Claire Student Baseline Survey (in class): financial knowledge, attitudes and behavior Student Follow-up Survey (in class): identical to baseline survey Schools with In-School Branches 50% financial education 50% no financial education Schools w/o In-School Branches 50% financial education 50% no financial education Control Group receives financial education Research Design

10 10 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Student Baseline Survey (in class): financial knowledge, attitudes and behavior Student Follow-up Survey (in class): identical to baseline survey Schools with In-School Branches 50% financial education 50% no financial education Schools w/o In-School Branches 50% financial education 50% no financial education Control Group receives financial education Research Design Student Follow-up Survey (in class): identical to baseline survey Follow-up Survey for Eau Claire 5 th Graders (in class): received treatment 1 year previously as 4 th graders 2 nd Year in 4 th Grade Classrooms – Eau Claire & Amarillo

11 11 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Offer of Happy State Bank Accounts Schools with Happy State Branch (randomly assigned) 50% $25 “seed” deposit 50% no $25 “seed” deposit Amarillo Pilot (Smarter Texans Save) “SEED” Deposit Research Design

12 12 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Established in 1993 Currently operate 27 school sites 17 elementary 5 middle schools 5 high schools 6 dedicated staff, 8 branch staff, 350 student team members 17,874 transactions last school year Video introducing School $ense Video introducing School $ense

13 13 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS In-School Banking, Eau Claire Royal Credit Union School $ense – Account Type: Joint ownership savings account – Frequency: Open once a week during the school day – Bank Transactions: Kids can make deposits and withdrawals at school branch – Student Staffing: Student tellers work with RCU staff 13

14 14 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Why we wanted to participate in the study Financial education in the classroom Need for research Staff development

15 15 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS

16 16 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS In-School Banking, Amarillo Happy State Bank Kids’ Banks – Account Type: Joint ownership savings account (also opened minor- only account for the pilot) – Frequency: Every 2-3 weeks (once a week during study period) – Bank Transactions: Kids can only make deposits at school branch – Student Staffing: Student tellers work with HSB staff (timing of research didn’t allow for student staffing during the study) 16

17 17 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Amarillo In-School Banking Take-Up Total Accounts Opened (all grades)615 Account Take-up (4 th grade)38% With $25 “Seed” Deposit Offer 43% Without $25 “Seed” Deposit Offer 32% “Seed” Deposits Distributed254 Value of “Seed” Deposits Distributed$6,350 Schools Continuing Kids’ Bank in (83%) Participation data is for study period, January 15 – June 7, Take-up percentages don’t include students at three elementary schools with existing Kids’ Banks. Total “Seed” deposits are for all 18 schools with Kids’ Banks.

18 18 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Account Take-up by School – Account take-up range: 20% - 60% – On average, the same or higher take-up in schools with more economically disadvantaged students Account Type – Child only: 26% – Joint: 74% – At two schools, majority of accounts were child only Amarillo In-School Banking Take-Up

19 19 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Insights and Successful Practices to Operating an In-school Banking Program Marketing is key to student participation, but keep materials simple Campus administration and staff support is critical to program’s success Have school district market in-school banking program to students Offer accounts that meet the needs of all families

20 20 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Amarillo Teacher Feedback Kids’ Bank: Nearly all positive feedback from teachers Students excited about saving & Kids’ Bank participation brought concepts taught to life Students’ Level of Understanding: Students initial level of understanding was very limited Items discussed in lessons should take into consideration students’ income levels

21 21 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS RESULTS 21

22 22 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Data Knowledge Financial Quiz Score: The number of questions answered correctly out of 13 questions Attitudes Spend Money Immediately: 5-point scale how often they find it hard to avoid spending money immediately Easy to Save: 5-point scale how often they find it easy to save money Saving is for Adults: 5-point scale how often they feel that saving money is only for adults Banks Useful to You: 5-point scale the degree to which they believe that banks offer services that are useful to them Banking Activity Banked: Students report whether or not they have a bank account in their own name Net Deposits: Total amount of money that is deposited into the account net of the total taken out of the account Active Account Use: Number of distinct occasions on which money is deposited or withdrawn from the account 22

23 23 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Sample Size & Results Overall Results – Large effects of education on knowledge questions – Moderate effects of in-school banking and education on attitudes – Education and bank access boost bank account ownership by kids – Effects persist Sample SizeEau ClaireAmarilloTotal No Financial Education Financial Education Total ,403 23

24 24 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Financial Quiz Scores Increased with Education Financial education appears to produce a large improvement in financial knowledge—an increase in the number of correct questions between 1.8 and 2.0 Students with bank accounts show stronger effects in terms of changes in learning, but not randomly assigned No evidence that having a bank branch in the school has an added effect on learning

25 25 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Attitudes About Financial Institutions Improved It’s Easy to SaveBanks Are Useful Positive effects of education and having a branch in school on attitudes about saving and banks, with strongest effects from financial education

26 26 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Increase in Being Banked from Education, Incentives Financial education increases the number of banked students by about 3.5% The likelihood of a student having a bank account was highly correlated with the presence of in-school financial services $25 incentive causes about an 18.1% marginal increase in students opening accounts Banking Status of Student

27 27 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Net Bank Deposits Rising (Eau Claire) Education Net deposits were higher on average (by about $7.69) after education, but not significant statistically In-school banking access is related to students more actively using accounts

28 28 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Persistence of Treatment Effects

29 29 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Key Findings Education – Relatively brief educational intervention has impact on knowledge And it lasts at least from 4 th to 5 th grade Being banked intensifies the effect Banked students are likely different…but banks in schools and incentives facilitate account ownership Attitudes about financial institutions strongly influenced By education and even just having a branch in school Account use proved hard to measure stably 29

30 30 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Policy and Practice Implications Classroom-based financial education can increase knowledge – Requires support to implement but is feasible if strategically developed – Potential of external support / community partnerships In-school banking access has direct and indirect impacts on attitudes about financial institutions and on having an account. – Incentives to start an account are clearly helpful, but add to costs Financial institutions need guidance on children savings marketplace 30

31 31 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Questions? 31

32 32 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Resources Treasury Notes blog Strategy.aspx CFS Publications ry_Students-_Brief_April14(2).pdf ry_Students-_Brief_April14(2).pdf CFED Inclusive Economy Blog based_financial_education_and_account_access_in_amarillo_tx/ For materials used in the pilots, visit: OpportunityTexas, Smarter Texans Save Download the full report and briefs at:

33 33 FINANCIAL EDUCATION AND ACCOUNT ACCESS AMONG ELEMENTARY STUDENTS Thank you for attending today’s webinar: Financial Education & Account Access Among Elementary Students This archived webinar and PowerPoint presentation will be available for viewing on the CFS and CFED websites. https://cfed.org Please contact Hallie Lienhardt or with


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