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Peters Introduces Bipartisan PIGGY BANK Act to Bolster Financial Literacy

Michigan Received “C” Rating on Financial Literacy Scorecard, Michigan Education Association Endorses Peters’ Bill

WASHINGTON, DC – U.S. Senator Gary Peters (MI) today introduced bipartisan legislation to bolster youth financial literacy amid the economic challenges exacerbated by the COVID-19 pandemic. The Program to Inspire Growth and Guarantee Youth Budgeting Advice and Necessary Knowledge (PIGGY BANK) Act, which was introduced with Senator Cynthia Lummis (R-WY), would provide high school students with resources to help them become self-sufficient in their personal finances by creating a youth financial matched savings pilot program that promotes financial literacy through practical and experimental learning – especially in low-income and underbanked areas. The legislation seeks to enable these high school students to gain financial literacy skills that they can carry on as adults.

“It’s vital Americans across the country including in Michigan have access to resources that will help them manage their personal finances – especially as we continue to navigate the pandemic and rebuild our economy,” said Senator Peters. “This bipartisan bill will provide students with an innovative experience and the tools they need to plan for the future, create stability for them and their loved ones, and lead to long-term financial security and success.”

“Too many Americans suffer from a real lack of financial literacy, and at a time when new technology is completely changing what that term will mean in the future,” said Senator Lummis. “I want young people in Wyoming and across the country to have a better understanding than previous generations of how to responsibly handle their finances, and I’m proud to work with my colleague Senator Gary Peters to bring this opportunity to today’s youth through the PIGGY BANK Act.”

“Education is all about preparing students for life beyond the classroom, and many educators have a passion for teaching the skills required for managing personal finances and making financial decisions. We know that without financial literacy, even the brightest students will run into trouble as they begin careers and start families. That’s why National Education Association (NEA) members are proud to support Senator Peters’ important legislation, a very practical approach that offers students a great incentive to learn financial literacy skills,” said Paula J. Herbart, President of the Michigan Education Association.

“Decreasing economic inequality and closing the racial wealth divide means creating saving pathways for low-income households to build wealth,” said Gary Cunningham, Prosperity Now’s President and CEO. “Prosperity Now knows from our decades of research and experience that matched savings programs can incentivize working families to boost their savings and get on a wealth-building path through opportunities for higher education, work and homeownership. With legislation like the PIGGY BANK Act, young people and their parents or caregivers can be set up for success in learning to save.”

“The National School Boards Association (NSBA) is pleased to work with Senator Peters regarding The Program to Inspire Growth and Guarantee Youth Budgeting Advice and Necessary Knowledge Act (The PIGGY BANK Act),” said Chip Slaven, Interim Executive Director and CEO of NSBA. “This legislation will foster innovative learning practices and instructional methods for our students that bridge school and real-world experiences, thereby helping them gain effective financial literacy skills. The PIGGY BANK Act will promote partnerships among our schools, students and families, communities, and government that bring together critical resources and enhance strategies that help students master academic and life skills to prepare them for success in college and careers.”

Amid the economic hardships of the COVID-19 pandemic, young people face a challenging landscape with high education costs, responsibility for retirement savings and uncertain long-term job and benefit security. In fact, Michigan received a “C” rating from the American Public Education Foundation scorecard on financial literacy and 11.4 percent of households making less than $75,000 in the state are underbanked. Nationwide, according to the American Public Education Foundation, only 57 percent of American adults are considered financially literate, one in five American teenagers lack basic financial literacy skills, and a lack of financial literacy cost Americans more than $415 billion in 2020.

The PIGGY BANK Act would establish a financial matched savings pilot program carried out by States and the Department of Education, the Department of Treasury’s Education Commission and the Division of Consumer and Community Affairs of the Federal Reserve. In addition to participating in a financial literacy class, high school students participating in the program would receive a $300 initial deposit and up to $25 per month of matching funds with the students’ savings. Parents or caregivers would also be encouraged to participate with their children in the match program and through financial literacy afterschool clubs and/or workshops. Funds may be withdrawn a year after high school graduation and acceptable withdrawals include postsecondary education, career technical education, homeownership, business ownership or medical hardship.

The Senators’ effort is supported by the Michigan Education Association, the National Education Association, Prosperity Now, and the National School Boards Association.