Why Tennessee requires personal finance in high school to graduate

There has been a wave of financial literacy legislation nationwide as states push to get personal finance classes into public schools — and Tennessee was one of the first to enact a high school mandate.

Since 2013, Tennessee has required a half-semester personal finance course for high school graduation and was among the first three states to add the mandate, according to Jackie Morgan, outreach senior advisor for the Federal Reserve Bank of Atlanta’s Nashville branch.   

“We were an early adopter,” said Morgan, who served as past president for Tennessee Jump$tart, an independent affiliate of the national Jump$tart Coalition for Personal Financial Literacy, which championed the policy.

“We’ve been able to help serve as a model for other states,” she said, pointing to Tennessee Jump$tart’s national recognition in 2009.

While financial literacy has long been a priority, the Covid-19 pandemic sparked a wave of state-level legislation nationwide, said Morgan, who also served on the board of the Tennessee Financial Literacy Commission.

In 2023, some 23.6% of U.S. public high school students were guaranteed to take a personal finance course, up from 16.9% in 2019, according to financial literacy nonprofit Next Gen Personal Finance’s 2023 annual report.

However, the majority of U.S. high school students can only take personal finance as an elective or part of another course, and access gaps exist along racial, socioeconomic and geographic lines, the same report found.

Currently, there are 23 states, including Tennessee, guaranteeing at least one semester of personal finance before high school graduation, as of Nov. 28, according to tracking from Next Gen Personal Finance.

Tennessee is one of only eight states that has fully implemented what the organization considers the gold standard: a stand-alone half-semester course dedicated to personal finance. Some 15 others are in progress.    

However, Tennessee is one of the few states that requires both economics and personal finance courses, whereas other places may prioritize one over the other. “It’s kind of like having a left hand without the right hand,” Morgan said.

In 2022, some 25 states required an economics course for graduation, according to an annual survey from the Council for Economic Education.

While Tennessee adopted the high school mandate earlier than most other states, there’s still room for improvement, advocates say.

“The work is never done,” said Bill Parker, director of the Tennessee Financial Literacy Commission, which aims to incorporate personal finance into schools “as early as possible.”

“When they get to that high school course, ideally, they’re in a position to hit the ground running with some more advanced concepts that they can apply to their own lives,” he said.

The Commission has outlined priorities in its five-year strategic plan, which has included thought leadership and state-level advocacy for expanded financial literacy programming. Numerous studies have highlighted the benefits of teaching children financial literacy at an early age.

“We’re glad to have so much support at the state level and so many passionate teachers,” Parker said. “It takes a special teacher to have the energy and enthusiasm to introduce financial literacy on top of all of the other things that they have going on.”

TUNE IN: The “Cities of Success” special featuring Nashville will air on CNBC on Dec. 6 at 10 p.m. ET/PT.

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