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I occasionally glance at the "Payday Loan" storefront, without really thinking about the business. The linked article explains that the Payday Loan business is a horrible debt trap. It's even worse than credit cards.


http://www.msnbc.msn.com/id/18367501/site/newsweek/

Dragged Down by Debt
People with shaky credit are getting suckered by risky loans against their paychecks, homes—and even cars.
by Jane Bryant Quinn, Newsweek

...With a payday loan, you write a postdated check against your next pay period and walk away with cash. The fees are stiff—Harris usually pays $50 for a $250 loan. In two weeks, the loan falls due. If you can't pay, it costs another fee to renew the debt for another two weeks. ...an annual interest rate of 521 percent....

Car-title loans can get consumers into even more trouble...You can borrow anywhere from $250 to $2,500 against a paid-up vehicle, giving the lender your title and a duplicate car key as security. There's a fee upfront and a triple-digit interest rate, the loan falls due in 30 days, and each time you renew you're charged the fee, plus interest, all over again. If you can't pay, you lose the car or truck you may need to get to work....

Payday and car-title lenders tend to cluster in low-income neighborhoods—especially around military bases, where families are young and borrowers aren't very savvy about interest rates. Congress recently slapped a 36 percent interest-rate cap on loans made to members of the armed services. But it left out everyone else, who pay rates that sometimes exceed 700 percent...


People who need this kind of loan are probably the least likely to be able to understand the trap. They are also the least likely to be able to pay off the loans.

The arguments for and against high-interest consumer loans are the same as for option-ARMs. They provide a source of credit, and potential for living a "richer" lifestyle, for people who wouldn't qualify for prime lending. They also get a lot of those people into financial trouble.

Quinn writes about a couple of handicapped brothers, who borrowed $250. After they paid off less than the entire amount, in a few months, the interest had accumulated, until the amount still to pay was higher than the original amount. They got a Legal Aid lawyer, who claimed that can't read well enough to understand the loan documents. The lender was willing to forgive the loan, but the lawyer wants to sue for damages.

I think that usurious lending is deplorable. However, if an adult is responsible enough to sign on the dotted line (i.e. doesn't have a court order of incompetence), he should be held responsible for his contractual agreements.

According to the Center for Responsible Lending, lenders collect 90 percent of their revenue from borrowers who cannot pay off their loans when due, rather than from one-time users dealing with short-term financial emergencies.

Payday lenders cost American families $4.2 billion every year in predatory fees. The Center for Responsible Lending supports a cap on interest rates for consumer loans in the 36-percent range.

http://www.responsiblelending.org/issues/payday/

Those who believe in a paternalistic role for government will support laws restricting predatory lending (I do). Those who believe in unrestricted free enterprise and the marketplace will not.

I think that schools should teach children how to recognize and avoid horrible debt traps.

Wendy

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"I think that schools should teach children how to recognize and avoid horrible debt traps."


I think parents should teach children how to recognize and aviod horrible debt traps.


But then again, loads of parents drop off their kids at school each day and expect ALL of life's lessons to be taught there.

No disrespect intended to you, Wendy.


MadamHusker 1


~ Lives adjacent to Title I elementary school... experiencing this behavior daily. Counting the days until summer vacation starts...
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http://www.msnbc.msn.com/id/18367501/site/newsweek/

"People with shaky credit are getting suckered by risky loans against their paychecks, homes—and even cars.
by Jane Bryant Quinn, Newsweek

...With a payday loan, you write a postdated check against your next pay period and walk away with cash. The fees are stiff—Harris usually pays $50 for a $250 loan. In two weeks, the loan falls due. If you can't pay, it costs another fee to renew the debt for another two weeks. ...an annual interest rate of 521 percent....

Car-title loans can get consumers into even more trouble...You can borrow anywhere from $250 to $2,500 against a paid-up vehicle, giving the lender your title and a duplicate car key as security. There's a fee upfront and a triple-digit interest rate, the loan falls due in 30 days, and each time you renew you're charged the fee, plus interest, all over again. If you can't pay, you lose the car or truck you may need to get to work....

Payday and car-title lenders tend to cluster in low-income neighborhoods—especially around military bases, where families are young and borrowers aren't very savvy about interest rates. Congress recently slapped a 36 percent interest-rate cap on loans made to members of the armed services. But it left out everyone else, who pay rates that sometimes exceed 700 percent..."

The fixed costs of generating and collecting on small loans make the interest rates appear astronomical.

36% is hardly a good rate.

And if you drive the legal pay-day and car-title lenders out of business then the only likely alternative is a shylock (which may be even worse).

Not sure of the solution.

Regards, JAFO
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<<I think that schools should teach children how to recognize and avoid horrible debt traps.

Wendy
>>



As you know, the Washington State legislature just postponed a math competency exit requirement for high school seniors that was going into effect next year, for several more years. The next day, the teacher's union came out with a proposal to postpone a similar reading competency test requirement.


When it's apparently unreasonable to expect students, teachers and school to teach or learn to a reasonable level of math competency, why would you want to add yet more math requirements that more than half the students apparently aren't going to learn?


Should we be satisfied with schools, teachers and students who merely have to go through the motions of teaching and learning?


Of course, some are learning very well indeed. But one wonders why the rest are there. Mainly for show, I suppose. I suspect that the ones who are learning don't need teaching about payday loans, and those who would benefit from such teaching probably wont bother learning from such instruction.



Seattle Pioneer
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<When it's apparently unreasonable to expect students, teachers and school to teach or learn to a reasonable level of math competency, why would you want to add yet more math requirements that more than half the students apparently aren't going to learn?>

Personally, I think that teaching practical personal finance is more important than teaching algebra and geometry, for the majority of students...if it's an either/or choice.

I agree with Madam Husker that teaching financial management is the responsibility of parents...except that many parents aren't able to manage their own finances competently, much less teach their kids.

I believe in useful, practical education. Speaking as a nerd, many kids don't enjoy, don't need, and won't retain a nerd's education. Better to teach them what they will need. Hardly anyone uses algebra, but everyone uses money.

Wendy
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<<I believe in useful, practical education. Speaking as a nerd, many kids don't enjoy, don't need, and won't retain a nerd's education. Better to teach them what they will need. Hardly anyone uses algebra, but everyone uses money.

Wendy>>



Mmmmm. I figure I use pretty much all the math I ever learned (through first year Calc) every day. It affects much of my life everyday and many of the decisions about how I live my life, view the world and public policy.

If we want to cut out academics for a lot of children who aren't suited for such study, that has merit. But choosing to educate most students has implications, and I oppose watering down academics if academics are what students are studying. The idea that we are going to educate most children, but just go through the motions and not expect them to learn is a grossly obnoxious idea to me.



Seattle Pioneer




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Hardly anyone uses algebra, but everyone uses money.


Wow. In my experience, using algebra is a common every-day occurrence. It seems to me that the world is made up of word problems, and you're always solving for the unknown - that would be classic algebra. In a lot of cases, this is probably being applied to a situation involving money, but the underlying math to solve for the unknown is algebra.

And then there's that useless geometry. That would be the one that all carpenters use when they are building things to figure out if something is straight. They use the 3-4-5 triangle which can be faster than using a square, particularly on a large frame like that use on a house.

Yeah, I can see where those algebra and geometry classes are never used. Not.
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And then there's that useless geometry. That would be the one that all carpenters use when they are building things to figure out if something is straight. They use the 3-4-5 triangle which can be faster than using a square, particularly on a large frame like that use on a house.

I got the chance recently to demonstrate applied geometry to my son. We had to figure out how much paint we would need to paint our house, so we needed to calculate the suface area of the outside of our house.

foolazis
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And then there's that useless geometry. That would be the one that all carpenters use when they are building things to figure out if something is straight. They use the 3-4-5 triangle which can be faster than using a square, particularly on a large frame like that use on a house.

---

I got the chance recently to demonstrate applied geometry to my son. We had to figure out how much paint we would need to paint our house, so we needed to calculate the suface area of the outside of our house.

---

And don't forget pool. Geometry has made me the pool player I am today.
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Hardly anyone uses algebra, but everyone uses money.


Wow. In my experience, using algebra is a common every-day occurrence. It seems to me that the world is made up of word problems, and you're always solving for the unknown - that would be classic algebra. In a lot of cases, this is probably being applied to a situation involving money, but the underlying math to solve for the unknown is algebra.


This is a major difficulty in the way math is commonly taught in the schools. Too often math, such as algebram is treated like it is this abstract discipline with no relation to the real world. Showing students how the math is used, rather than just teaching them to solve an abstract equation helps them learn, shows why it is important to understand and can remove some of the intimidation factor.

As for teaching things like money basics in school, it will be interesting to see what happens in my old hometown. They are in the process of building their own high school (finally). Part of the cirriculum they have proposed is a mandatory course for all students that they are calling "Basic Living" or something (can't recall exactly). They are still working out the details, but they say they are planning to teach checkbook balancing, loan basics, how interest rates work, how to read a contract such as credit card and rental agreements and other skills that would be valuable to have by the time they are 18 years old.
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Payday and car-title lenders tend to cluster in low-income neighborhoods—especially around military bases, where families are young and borrowers aren't very savvy about interest rates.

Does anyone know what happens when you forfeit your car to a title loan place? DH went to school w/ a guy who turned over his $500 car to one. This person was leaving the country and didn't need the car, anwyay. Just curious what the effect would be on your credit.

mm
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And don't forget pool. Geometry has made me the pool player I am today.


Don't laugh, but we've used the pool table we have to teach DS about geometry and how angles work. It's nice and concrete, plus it's fun so he likes it and it does seem to stick.
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Don't laugh, but we've used the pool table we have to teach DS about geometry and how angles work. It's nice and concrete, plus it's fun so he likes it and it does seem to stick.

---

Pool is no laughing matter.
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People who need this kind of loan are probably the least likely to be able to understand the trap. They are also the least likely to be able to pay off the loans.

They are also more likely to violate the terms of the agreement that they sign, most of which dictate that the client not have more than one loan out at any given time with ANYONE (I worked for the two biggest chains in Phoenix). Yet, I read story after story of people who "got in over their head" by borrowing from 3, 4, or 5 loan places at the same time.
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<They are also more likely to violate the terms of the agreement that they sign...>

Borrower fraud is also a problem, with subprime mortgages. Studies show that over half of subprime mortgage borrowers overstate their incomes.

Wendy
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Borrower fraud is also a problem, with subprime mortgages. Studies show that over half of subprime mortgage borrowers overstate their incomes.

Lender fraud is a problem, too.

At MoneyMart, the official rules stated we were not permitted to lend more than 50% of a customer's paycheck (whether weekly, bi-weekly, semi-monthly, or monthly.) Take home pay.

We would often be told by the AM to fudge the numbers and fool the computer by listing all customer's pay periods as "weekly" and listing gross pay, not net.


I'm sure such "fudging" occurs in the sub-prime mortgage industry, as well.
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<I oppose watering down academics if academics are what students are studying. The idea that we are going to educate most children, but just go through the motions and not expect them to learn is a grossly obnoxious idea to me.>

I absolutely agree, 100%!!!

NY State, where I grew up, had Regent's exams, every year, for English, math, science, and social studies. No excuses. I took these every year, starting with the algebra Regents, which I took at age 13 (scored 100%).

We also took the Iowa Test, in junior high. Is that still given? Of course, we took the PSAT, SAT, and National Merit Scholarship test, in high school. My school day, in high school, was 9 periods long. My cohort took music, art, gym and computer programming every day, on top of the core curriculum of English, math, social studies, and science (this was in 1969). As a senior, I also took Advanced Placement English and Biology.

I have heard that high school has been reduced to only 5 periods per day.

Personally, I support uniform, nationwide testing. That way, individual states can't water down the test, and all students would be scored on a level playing field.

Sorry for being off-topic...but this is a hot button, for me.

However, if the educational establishment insists on watering down math, I think many students would be better off learning financial planning, rather than, say, trigonometry.
Wendy
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Since you have worked in the business, I'd like to ask...

Do you think that more regulation would help keep borrowers from being trapped? If so, what would you recommend?

How could both borrower and lender fraud be eliminated...or at least, reduced?
Wendy
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Do you think that more regulation would help keep borrowers from being trapped?

No. In most cases, my customers were not "trapped" into the payday loans, they just had their priorities really screwed up. I saw more gold on my customers in any given day than in most jewelry stores. We had so many luxury cars in our lot, you would have thought we were Neiman-Marcus. Name brand clothing was as prevalent as complaints about how expensive it was to pay insurance on a leased car. Many of our customers had addresses at the luxury apartments that rented starting at $1,200/month for a one bedroom.

My last apartment, a 1 bedroom, was 700 sf, and only cost me $545/month, which included a washer/dryer in my unit. So, I know that the "market" was not the cause of the high rent.

We also had a lot of customers on some type of welfare - whether it was straight up welfare or just food stamps, or SSI payouts.

If so, what would you recommend?

I would recommend more education in the elementary grades on how money works. I would recommend that this education not be funded by Visa or Mastercard.

How could both borrower and lender fraud be eliminated...or at least, reduced?

It would be cost prohibitive for the company to monitor the employees (hence the abusive "getting around the computer program"), let alone the government monitoring the companies.
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>> ... many parents aren't able to manage their own finances competently, much less teach their kids.



Last year a neighbor was talking to the police officer who responded to write up the theft of his car. As he was giving details he mentioned that there was a book of signed checks in the glove box.

The officer's eyes bugged out, but he didn't say anything.

I couldn't help it, "Are you friggin' nuts?" The officer smiled, but kept his head down writing on a form.

The fellow look at me with confusion -- "That's what my parents do."


My parents didn't teach me much beyond the fun of a piggy bank, so I learned to write checks from my First Sergeant when I got to my first AF base. I was 18. He sat down to give me the basics when I asked him if he could tell me how to open a bank account. He wasn't there any more a year later when I wanted to know about CCs, and the new 1st Sgt couldn't be bothered. I figured it out by winging it until 2 decades and much wasted money later, when I found TMF.

My brother still uses cash advances from one CC to pay the minimum and over limit fees on another card. He prides himself on never being more than 30 days late on any bill. "Works for me," is all he'll say when I suggest alternatives.



Financial education is like sex ed. We gotta get the info somewhere -- better to get it from a knowledgeable person than to pick it up on the streets.



Penny
learned both topics the hard way
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<<However, if the educational establishment insists on watering down math, I think many students would be better off learning financial planning, rather than, say, trigonometry.
Wendy
>>


What this argues for is a bifurcation of schooling with an academic track and a trades oriented track. I think that would be a good and a realistic thing to do, but American public schools can't really accept such an idea very well.

Too bad. They often wind up boring people not interested in academics wholearn little and may drop out of school, and water down academic subjects which may bore talented students.

What a deal. All in the name of phoney egalitarianism.



Seattle Pioneer
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What this argues for is a bifurcation of schooling with an academic track and a trades oriented track. I think that would be a good and a realistic thing to do, but American public schools can't really accept such an idea very well.

When I was in high school (twenty years ago!), there was just such a situation. There were three tracks: college prep, general, and vo-tech. College prep prepared you for college with more advanced classes than the general track and vo-tech taught you a trade. I think vo-tech stood for vocation and technical. Like I said, this was twenty years ago.

Minxie

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That way, individual states can't water down the test, and all students would be scored on a level playing field.

Agreed. Except that you can't have standardized testing without having standardized teaching. The states that can afford to pay for better teachers (or have stricter certification requirements, among other things) will have a leg up come test time.

I also agree that many students would benefit more from a Personal Finance class than Trig. Of course, I loved Trig myself....
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What this argues for is a bifurcation of schooling with an academic track and a trades oriented track. I think that would be a good and a realistic thing to do, but American public schools can't really accept such an idea very well.


This is done in MA where we have high schools specifically for college prep, and high schools specifically for vocational training. The vocational schools tend to be regionalized so that they have enough population to justify the school as well as have enough of a budget to support the wide variety of programs. My son actually attended the vocational school for 9th grade, but he transferred to the college prep school in 10th grade which seems to be a much better fit for him.

Personally, other than the distance typically involved in getting to the vocational school, I find this to be a really good model that addresses all levels of kids with all kinds of interests. What I do find distressing in MA is the current push to force all kids to be in the college track and take the courses to get into college. We still need electricians and plumbers and carpenters and chefs etc., and those folks are better served going to a trade school or into an apprenticeship than going to college.

We had that same thing in RI in certain towns back when I was a kid and in high school in the 1970's, so this has been out there for some time.
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>> When I was in high school (twenty years ago!), there was just such a situation. There were three tracks: college prep, general, and vo-tech. College prep prepared you for college with more advanced classes than the general track and vo-tech taught you a trade. I think vo-tech stood for vocation and technical. Like I said, this was twenty years ago. <<


I was schooled this way, too. (graduated HS in 1978)

The students were divided into four groups:

A = advanced placement, students who were a shoe-in for higher college degrees
B = college prep for people who were likely to go to a 4 yr college
C = general level for folks who are unlikely to go to college, but who might if they try hard
D = "the dummies" were people who were destined to jobs, not careers.

Students were shunted into this last group just after elementary school and were actively encouraged to change over to the regional Vo-tech for high school. Teachers and administration worked extra hard to push these students out, often through harassment and by making school a miserable experience.

So many D students were cleared out, that the percentage of students who went on to college outshined all the school in the area, and we frequently made top 10 ratings in national lists.

I think the first two divisions were great for advanced students as they got an education that challenged them. The bottom two divisions could have done better if they had gotten lessons that challenged them, as well.

Those of us shunted into the D classes who didn't drop out or go to Vo tech weren't required to actually pass any of our classes in order to move to the next grade. We were only expected to attend and try to sit quietly so as not to disturb the teacher.

It wasn't until my mid 20s when I wanted to take college classes after work that I discovered that I was actually intelligent, and didn't need to start with the remedial classes I signed up for.


Penny
hates school, loves learning
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<<<When I was in high school (twenty years ago!), there was just such a situation. There were three tracks: college prep, general, and vo-tech. College prep prepared you for college with more advanced classes than the general track and vo-tech taught you a trade. I think vo-tech stood for vocation and technical. Like I said, this was twenty years ago.

Minxie>>>>
*********************************
When I was in high school, in addition to the three tracks you list, we also had something called Distributed Ed and Vo Ag. I think vo ag was pretty much passe at that point and I don't know of anyone in it. There was a greenhouse on campus.
The distrib ed ( at least I think that is what it was called) was the general track watered down. They took business math and law instread of trig and calculus. Once they were seniors their schedules were arranged so that they were dismissed at 1pm to go to a job. I have no clue how they got the jobs and whether they could get off earlier in the lower grades as well.
The way the school was set up the college prep people seldom mingled with the DE and Vo-ag people and not too much with the general track people except in electives like chorus.

All this was way back in 1971. DS and DD went to a private school that was all college prep although I am not sure all the students needed to go on to college. All are accepted somewhere, however, and most finish.






Molly--did the college prep track


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<What this argues for is a bifurcation of schooling with an academic track and a trades oriented track.>

When I was in high school, this was the setup. It worked. Time to change back.

Wendy
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<The states that can afford to pay for better teachers (or have stricter certification requirements, among other things) will have a leg up come test time.>

Wouldn't that give the lower-scoring states an incentive to invest in better teachers and stricter requirements?

Wendy
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<<Financial education is like sex ed. We gotta get the info somewhere -- better to get it from a knowledgeable person than to pick it up on the streets.


>>


If it's taught in the schools, you will have VISA card reps explaining "How To Get Your First Credit Card" and GMAC explaining "How to Buy Your First New Car."


This is the consumer society, and frugality is a deviant value. Why do people suppose schools are going to teach such deviant values in school, which will promote hostility from a lot of parents who live by the values of the consumer society.





Seattle Pioneer
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Wouldn't that give the lower-scoring states an incentive to invest in better teachers and stricter requirements?

Actually, it probably gives them an incentive to 'teach to the test' rather than teaching real critical thinking and analysis skills, thus cutting out the few real world applications were in the curriculum to start with.

AJ
What gets measured is what gets done
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NY State, where I grew up, had Regent's exams, every year, for English, math, science, and social studies. No excuses. I took these every year, starting with the algebra Regents, which I took at age 13 (scored 100%).

Well, with the No Child Left Behind act, there is a minimum amount of standardized testing that is federally mandated. From the Wikipedia entry:

"The progress of all students will be measured annually in math and reading in grades 3 through 8 and at least once during high school. By the end of the 2007-2008 school year, testing will also be conducted in science once during grades 3–5, 6–9, and 10–11."

So you can be reassured that kids are being tested, that it's federally mandated, and since it's tied to the funding the schools receive, it ends up causing the full range of human behavior from the noble and good to the scurrilous.

We also took the Iowa Test, in junior high. Is that still given? Of course, we took the PSAT, SAT, and National Merit Scholarship test, in high school. My school day, in high school, was 9 periods long. My cohort took music, art, gym and computer programming every day, on top of the core curriculum of English, math, social studies, and science (this was in 1969). As a senior, I also took Advanced Placement English and Biology.

I have heard that high school has been reduced to only 5 periods per day.


I don't know how long the high school day is, but it's not any shorter, time-wise, than it was in '69 (at least in California and Texas, and I'm pretty sure in the whole country). Some schools have a schedule that's more like college, where you go to a class on Monday, Wednesday, Friday, or Tuesday-Thursday, and they have longer periods but fewer in a day. That might be why you thought high school had been reduced somehow.

And actually, I am sort of jealous of you getting to take art, music, and gym class. Yes, I'm jealous of your gym class, because that means your school probably had a gym teacher. Funding is tight at schools, and often the first things cut are gym, art, and music classes. My son's previous and current elementary schools didn't have a gym teacher. Obesity is a huge, huge problem with kids today, and diabetes is showing up earlier and earlier, but schools often don't have the money to spend for a teacher for it.

As for music and art, the last school district we lived in was considered excellent in part because they have a huge fundraising organization that funds after-school music programs and art programs, and also helps fund "Class Size Reduction," which is keeping classroom size to 20 students or less in 1st, 2nd, and 3rd grades. I believe the state funds it for 1st and 2nd grade, but IPSF (Irvine Public Schools Foundation) funds it for the Irvine school district for 3rd grade.

Personally, I support uniform, nationwide testing. That way, individual states can't water down the test, and all students would be scored on a level playing field.

Sorry for being off-topic...but this is a hot button, for me.


I am a bit surprised that, it being such a hot button topic for you, that you're not more informed about it. I guess if you don't currently have a school-aged child, it's harder to realize what's going on with schools. I respectfully suggest to you that a current high school student might hear your high school schedule and think you had it easy, what with all those fluff classes like music, art, gym, and your testing that affected you, but not the school's funding.

Perspective is a funny thing.


--Booa
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And don't forget pool. Geometry has made me the pool player I am today.

Physics made me the pool player I am today--all those vectors.

Of course, I got a C in Physics...
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Physics made me the pool player I am today--all those vectors.

Of course, I got a C in Physics...


Physics taught me what is supposed to happen on a pool table. I can see all those bounces and ricochets and how hitting the ball at a different spot sends it in a different direction. Pool is a really interesting example of applied physics.

Unfortunately, my A in physics didn't do anything for my manual dexterity. I have always been a mediocre to poor pool player.

Patzer
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Wouldn't that give the lower-scoring states an incentive to invest in better teachers and stricter requirements?

Sure, if they have the resources to do so. But if they don't....
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Wendy, with all due respect, I disagree with the prospect of a paternalistic government, but I agree that schools should have financial education as a mandatory part of their cirriculum, not just basic math and algebra. We should teach how to use numbers effectively rather than just how to add and subtract, multiply and divide.

Parents should also help teach financial education to their children, but the vast majority of them are in the same boat at the present time. That is why TMF and other financial advice/service providers are doing better all the time and CFPs and CPAs make the big bucks for filling out rather simple tax or other forms, for example.

Some high schools teach accounting and business courses now, that is a step forward, but a comprehensive personal financial management class in high schools and colleges would probably be very beneficial. In some states business teachers dont even need all the certifications that other teachers need. Most of the time an emergency certification will do (at least that is how I understand the system in PA).

bdgf06
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We should teach how to use numbers effectively rather than just how to add and subtract, multiply and divide.


What does this entail? I don't understand why basic algebra doesn't cover this since that focuses on solving for the unknown and word problems. The world it just one big word problem, so if you can solve those, you have the basic skills needed. I don't understand what else is needed to be able to manage finances.

Some high schools teach accounting and business courses now, that is a step forward, but a comprehensive personal financial management class in high schools and colleges would probably be very beneficial.

Here, I'm going to disagree. I don't think you need accounting or business courses to be able to do your own financial management. I don't see where that's necessary or required at all. Can you elaborate?

I'd also like to know how you would propose to fund these changes you'd like to see as the money will have to come from somewhere, although the federal and state governments have been giving the schools mandates with no funding for years, so I suppose there's no reason we couldn't do the same thing with this. Somehow, though, I doubt that digging the municipal debt hole deeper is the right way to be managing teaching finances.
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Back when I graduated from high school in New York (near Syracuse) to get a regents diploma, I took these exams (class of 95)

7th grade: Course I Math (Algebra)
8th grade: Course II Math (Geometry)
9th grade: Course III Math (Trig), Earth Science,
10th grade: Biology, World History, French
11th grade: Chemistry, American History, English
12th grade: Physics
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What does this entail? I don't understand why basic algebra doesn't cover this since that focuses on solving for the unknown and word problems. The world it just one big word problem, so if you can solve those, you have the basic skills needed. I don't understand what else is needed to be able to manage finances.

The problem is that math classes are taught in a vacuum, or at least all of mine were when I was in school. I know when I was a student taking algebra, all I saw were formulas I had to memorize and try to understand, but they never showed us any real world application for them. The result was that I didn't see the point in learning it. I know that I am not the only one this happened to.

If the math were taught in the context of how it can be applied, rather than an abstract formula that appears to only matter to mathematicians, students would begin to learn why it is important and could better understand when to use the math skills they have learned in different situations.
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2gifts,

We should teach how to use numbers effectively rather than just how to add and subtract, multiply and divide.

What does this entail? I don't understand why basic algebra doesn't cover this since that focuses on solving for the unknown and word problems. The world it just one big word problem, so if you can solve those, you have the basic skills needed. I don't understand what else is needed to be able to manage finances.


This entails focusing more on problems relating to debt management, the basics of investing and saving, much of what is discussed on here already. As of now most business and accounting classes in high school teaches how to do a checkbook and not much else, at least in my experience. Including more real life practical problems into the course would be very beneficial. Case studies could include people like those on here who have already done the big happy dance and overcome $100K+ of debt and the techniques behind it. People such as determinedmom or shirehobbit come to mind here. Early exposure to TMF may help boost revenue for the Gardners, they would like that i'm sure!

Algebra is nice for many things, but stressing 1x + 2y = 3z is not usually the best way to prepare young people for handling personal finances.


Some high schools teach accounting and business courses now, that is a step forward, but a comprehensive personal financial management class in high schools and colleges would probably be very beneficial.

Here, I'm going to disagree. I don't think you need accounting or business courses to be able to do your own financial management. I don't see where that's necessary or required at all. Can you elaborate?

I'd also like to know how you would propose to fund these changes you'd like to see as the money will have to come from somewhere, although the federal and state governments have been giving the schools mandates with no funding for years, so I suppose there's no reason we couldn't do the same thing with this. Somehow, though, I doubt that digging the municipal debt hole deeper is the right way to be managing teaching finances.


Basically, I was saying that expansion of current courses in accounting and business can be expanded to include all of this in the same course, resulting in no or very little increase in costs to those school districts who already offer these courses. I would probably focus on Juniors and Seniors especially since they will need those skills as soon as they begin working on their own and going to college.

Accounting is the process of keeping track of numbers and being able to put them into a format that gives the most information in the simplest form possible. Business skills are the foundation of the economy. I believe that makes them necessary, and I wish I had access to information such as this when I was 16 and 17.

Those school that don't have these courses would have to make a choice to invest a little in such a course if the funds are available. Of course, we can go on for days about the benefits and costs of such a move, but if there were no cash crunches, we would not have this bulletin board.

Also, there are other potential benefits of such a course. More schools can participate in "stock market games" and competitions against other schools, which could bring additional positive publicity to schools and children, and goodwill such as this is hard to put a price tag on. Being able to offer additional extracirricular activities is shown to be good for the youth, and having an additional one can't hurt, especially one that exposes the youth to real life situations that they will encounter later in life, the prime example being investing and saving.

Another thing to be aware of is that business and finance for a government/non-profit entity is a whole different ball of wax than personal/business finance. When you talk about incurring more municipal debt in order to teach finances, its not necessarily a true statement, since government/non-profit entities are supposed to not "show a profit/surplus", hence you will almost always see zeros and red ink when you see financial statements on them. Non-Profit/ Government Accounting, however, is college level accounting courses and should probably stay there, it can get quite confusing.

Hope this helps clear some of those things up,
bdgf06
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My thoughts exactly thornir. I always had a formula card for algebra and later for my Basic Stats class in college.

My HS Calculus class was a joke, it screwed me up more when I took college Calculus 1.

bdgf06
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The problem is that math classes are taught in a vacuum, or at least all of mine were when I was in school. I know when I was a student taking algebra, all I saw were formulas I had to memorize and try to understand, but they never showed us any real world application for them. The result was that I didn't see the point in learning it. I know that I am not the only one this happened to.

If the math were taught in the context of how it can be applied, rather than an abstract formula that appears to only matter to mathematicians, students would begin to learn why it is important and could better understand when to use the math skills they have learned in different situations.



Thanks for the explanation. I understand now.

Math is not taught like that in our district. We start from the elementary grades with connecting math to real-life, and it has been very well-received.

When I was in school, math was more theoretical, but the word problems were typically something in real life, so I had no problem making the leap from algebra to usefulness, and I did not have a particularly good school system.
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Wendy: However, if the educational establishment insists on watering down math, I think many students would be better off learning financial planning, rather than, say, trigonometry.

SP: What this argues for is a bifurcation of schooling with an academic track and a trades oriented track. I think that would be a good and a realistic thing to do, but American public schools can't really accept such an idea very well.


I don't really see how this is relevant here. Which track needs financial education more? No matter where you end up after graduation, you still need to know financial basics. I can vouch for the fact that learning trig does not mean that you know how to manage money.

mm
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This entails focusing more on problems relating to debt management, the basics of investing and saving, much of what is discussed on here already. As of now most business and accounting classes in high school teaches how to do a checkbook and not much else, at least in my experience. Including more real life practical problems into the course would be very beneficial. Case studies could include people like those on here who have already done the big happy dance and overcome $100K+ of debt and the techniques behind it. People such as determinedmom or shirehobbit come to mind here. Early exposure to TMF may help boost revenue for the Gardners, they would like that i'm sure!


I understand, and I disagree. I don't actually wany my kids to learn debt management. I would prefer they know enough not to get into debt. That particular lesson belongs to me as a parent when I teach them their financial skills, and it's right up there with learning how to cook, do laundry, and do car maintenance.

I had basic math in school, and had no problem understanding how money worked. Maybe I'm an exception, but my parents, who grew up during the Depression and didn't even finish high school had no problem understanding finances. It's really pretty basic. You cannot spend money you don't haven, hence there is no debt because there is no borrowing.

It is not lack of math education that puts some people into debt. It is the part about ignoring you can't spend money you do not have. It would seem to me that that part would become readily apparent the first time a credit card bill is not paid in full, and next month's bill shows up with a charge for interest.

No, this does not belong in the schools. The responsibility for deciding to spend money that someone doesn't have rests with that someone, and their spending habits are not formed poorly because they missed a math class. Those habits are formed that way because they don't want to wait and want everything now.
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<<Some high schools teach accounting and business courses now, that is a step forward, but a comprehensive personal financial management class in high schools and colleges would probably be very beneficial.

Here, I'm going to disagree. I don't think you need accounting or business courses to be able to do your own financial management. I don't see where that's necessary or required at all. Can you elaborate?
>>


I think the idea is that after 12 years of school and the benefit of a high school diplomma, there is no reason to suppose people can apply what they have learned (assuming they have learned), and no reason to assume they can read and understand any of the vast number of books that explore personal financial issues.

I imagine the idea further supposes that these same people who haven't learned to be able to read or do simple mathematics would indeed learn from yet more reading and math assignments that discussed things like balancing a checking account or buying health insurance.


Public schools apparently deny the You-Can-Lead_A-Horse-To-Water-But-You-Can't-Make-Him-Drink theory of behavior. Public education usually has herds of cattle standing around in classes, many of whom wont drink except soda pop at lunchtime.


Public schools ought to get about half or more of students out of school by about age 15 or 16 and quit wasting everyone's time and money.





Seattle Pioneer
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<<SP: What this argues for is a bifurcation of schooling with an academic track and a trades oriented track. I think that would be a good and a realistic thing to do, but American public schools can't really accept such an idea very well.

I don't really see how this is relevant here. Which track needs financial education more? No matter where you end up after graduation, you still need to know financial basics. I can vouch for the fact that learning trig does not mean that you know how to manage money.

mm
>>


If you can read and do trig, which ought to include understanding exponential equations, you have all the math you need to understand personal finance and investing issues.

You then need to do some reading among the limitless number of books and magazine articles on personal finance issues.


If you can't do that, you deserve an "F" in your education classes. And if you can't do that, there is no reason to suppose that spoon feeding people yet more things they are not going to study or understand is going to do them much good.




Seattle Pioneer
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Some high schools teach accounting and business courses now, that is a step forward, but a comprehensive personal financial management class in high schools and colleges would probably be very beneficial. In some states business teachers dont even need all the certifications that other teachers need. Most of the time an emergency certification will do (at least that is how I understand the system in PA).

I hate to keep harping on No Child Left Behind, but at least at public schools in the U.S., all teachers, even classroom aides, have to be "highly qualified" as defined by law. My son's school last year had classroom aides and translators that had to provide proof of their qualifications to still be employed at the school, even if what they mainly do is translate for the kids in class that only speak Chinese, that kind of thing. The Chinese translator, who was in her fifties, had to get her transcript from undergrad, from her university in Beijing, and it was kind of a thing.

Anyway, the requirements as summarized in Wikipedia are:

The No Child Left Behind act requires that (by the end of the 2005-2006 school year) all teachers be "highly qualified" as defined in the law. A highly qualified teacher is one who has fulfilled the state's certification and licensing requirements. New teachers must meet the following requirements:

* Possess at least a bachelor's degree
* Elementary teachers must pass a state test demonstrating their subject knowledge and teaching skills in reading/language arts, writing, mathematics and other areas of basic elementary school curriculum.
* Middle and High school teachers must pass a state test in each academic subject area they teach, plus have either an undergraduate major, a graduate degree, coursework equivalent to an undergraduate major or an advanced certification or credentialing.

Teachers not new to the profession must hold a bachelor's degree and must pass a state test demonstrating subject knowledge and teaching skills. These requirements have caused some controversy and difficulty in implementation especially for special education teachers and teachers in small rural schools who are often called upon to teach multiple grades and subjects.


And if you don't trust Wikipedia (which maybe we shouldn't), there's also the government's site at http://www.ed.gov/nclb/landing.jhtml.

I'm not familiar with how Pennsylvania does it, and I think private schools are exempt because they don't receive federal money, but the emergency certification might be an attempt to satisfy NCLB, on the way to getting more standard certification. Also, it's possible Pennsylvania joined Utah in deciding not to follow NCLB, so maybe it's not applicable there.

Anyway, I will really really try to shut up now. I'm sorry, I spent all last year hearing about NCLB, it's sort of at the top of my brain.


--Booa
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If you can read and do trig, which ought to include understanding exponential equations, you have all the math you need to understand personal finance and investing issues.

You then need to do some reading among the limitless number of books and magazine articles on personal finance issues.


This is true, but based on the stories we see here, it's obvious that most financial problems are psychological.

Smart girl that I was, I figured that once I had my degree I'd be making big bucks. It was okay to charge lots of things because soon I'd have a great job and be able to pay it off, no problem. If someone had taught me how to do a budget, I'd have been much better off.

The fault for this lies with my parents, not my school, IMO.

mm
Still proving that intelligence does not equal common sense
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<<Smart girl that I was, I figured that once I had my degree I'd be making big bucks. It was okay to charge lots of things because soon I'd have a great job and be able to pay it off, no problem. If someone had taught me how to do a budget, I'd have been much better off.

The fault for this lies with my parents, not my school, IMO.

mm
Still proving that intelligence does not equal common sense
>>



Foolish is as foolish does. I hope you are kidding about blaming your parents.


I like to suggest that you can divid people into three groups ---

A minority who can learn from parents, school, books and such


A majority who can learn from their mistakes


Another minority ---who never learn.




It sounds like you, like me, might tend to be in group #2.



It also suggests why schooling in personal finance issues is likely to be futile for a large majority of people, and unnecessary for many of the rest.



Seattle Pioneer
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Foolish is as foolish does. I hope you are kidding about blaming your parents.

That probably came out wrong. I don't blame my parents. I fall into the camp that says that it is a parent's job to teach children to budget, not a school's. This was probably taught somewhere (home ec?) but not in any of my coursework.

I don't blame them for my mistakes, but I will ensure that DSis (12 y.o.) will get more of a hands-on financial education than I did. I turned out okay, it just took me a while to find my way there.
mm
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The fault for this lies with my parents, not my school, IMO.


Let's see. You were spending money you didn't have in anticpation of getting a good job with a good paycheck. How is that the fault of either your parents or your school? They weren't making that decision - you were. Why doesn't the responsibility for making that decision rest on your shoulders?
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Let's see. You were spending money you didn't have in anticpation of getting a good job with a good paycheck. How is that the fault of either your parents or your school? They weren't making that decision - you were. Why doesn't the responsibility for making that decision rest on your shoulders?

I'm not sure if you read my other reply, but let me rephrase what I said again. I can see from rereading it how you got to that conclusion.

My parents are not responsible for my overspending. My parents modeled great financial behavior, but never talked specifically about the reasons it's good to have a budget or how to make one. I was not looking for handholding, but a little more guidance may have helped.

My point is not to blame my parents for my (now eliminated) debt. My point is to say that every kid needs some financial guidance, and I wish that I had gotten it at home. It may have saved me from some dumb decisions.

And just in case that wasn't clear enough, I take full responsibility for my own debt.
mm
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2gifts,

I respect your perspective on this and your position. Parents are supposed to be involved in teaching these skills as well, I just think having classes in high school and college would be helpful and should be optional elective in coursework.

I guess we will have to agree to disagree on it. I am from Generation X and you are one or two generations prior to that. Things were radically different then and now.

I guess the best example of this would be the billion dollar credit corporations spending tens, if not hundreds of millions of dollars for TV/radio/internet advertising American Express, Visa, and Mastercard, and pushing messages such as "Get what you want now, pay for it later" that are prevelant recently and was practically non-existant when you were growing up, when credit was mostly for the well-to-do and high income earners.

In my case personally, I was exposed to Visa/Mastercard at age 5 when a commerical came on while I was watching cartoons. If the companies can reach that young of an audience that early, they are going to get curious and ask questions, as I did with my parents. And of course if your parents tell you not to do something at certain ages, we go ahead and do it anyway because kids know it all at certain ages. CC companies now seem to be similar to the tobacco industry back in the day, hook em early, hook em for life.

This is a big time hot button issue, i'm sure we can go for 1000 threads on it and not seem to get anywhere.

bdgf06
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Booa,

I believe I oversimplified some things in my post, which prompted your well-written response.

In PA all teachers must have a Bachelor's Degree. However, business/accounting teachers do not have to take all the Praxis testing in PA, the emergency certification and the Bachelors pretty much get you in the door, plus the necessary federal and child abuse background checks of course. I was speaking to the differences between standard testing qualifications in PA for math, history, etc. teachers as opposed to business couse teachers.

I believe you are correct that private schools fall under different guidelines unless they are funded by the state or fed.

bdgf06
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I am from Generation X and you are one or two generations prior to that. Things were radically different then and now.



OK, now I really feel old. I just turned 49. Am I that much older than you?

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Thanks for the clarification. :-)


--Booa
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2gifts,

I am 25, so I guess that is a little bit of an age difference :)

bdgf06
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