Most states now require that high school students take personal finance courses, and some districts are going a step further with their financial education.
New York City Mayor Eric Adams this month announced a new pilot program that will involve setting up bank branches at schools, where teens will be able to use them and gain hands-on experience managing bank accounts.
The pilot, involving 15 of the city鈥檚 roughly 500 high schools and 12 financial institutions, will not only introduce in-school banking services to students and their families, but also offer workshops on responsible money management and banking, and connect students with career opportunities in finance.
The initiative is unique, experts say, especially given that it鈥檚 taking place in the nation鈥檚 largest school district, with the potential to spread to 350,000 of the city鈥檚 more than 900,000 students by 2030. But there are evidence-backed approaches districts can follow to ensure students get the most out of an in-school banking initiative.
In an interview with Education Week, Yanely Espinal, the director of educational outreach for Next Gen Personal Finance鈥攁 nonprofit that provides financial literacy education for teachers and has a personal finance curriculum鈥攕poke about how schools can build successful in-school banking programs, potential pitfalls to look out for, and how the initiative can benefit the broader community.
This interview has been edited for length and clarity.
How common is in-school banking?
There are a small number of schools, primarily in rural areas or very small school districts, that do have a credit union in the school building鈥攐r very nearby to the school鈥攖hat actually supports and services the community members, including students, their families, teachers, and staff members.
It鈥檚 definitely out there, but it鈥檚 not commonplace.
Usually, when I do hear about it, it鈥檚 this special, very cool thing that gives the school a little bit of an edge over other nearby schools.
What are the keys to successfully standing up an in-school banking program?
The key here is that they specifically vet the banks and credit unions to make sure that they are designed to meet the everyday needs of underserved individuals and families.
They have to have low account fees or no monthly fees on their accounts. They cannot have overdraft fees. They have to allow access to online bill payments, and have no minimum balance requirements, so there鈥檚 no fee if you go below $50 in your account or something like that. And then they also have a ton of consumer protections in place.
That, to me, is the gold standard when I鈥檝e learned about offering banking services to families and students in schools.
(Espinal cited the as a good guidepost for establishing these benchmarks and criteria.)
Why is that so important?
If you鈥檙e a teen or generally unfamiliar with banking, you might not have the education to know that you are a customer who can go out there and really shop around. And so you might think that this is really the only option, or the easiest option, and then you end up paying all these monthly fees, overdrafting, and not knowing that there鈥檚 a fee if you go below a certain amount.
And some people might say, 鈥極h, a $5 fee is nothing.鈥� But when you see how that adds up over time for low-income communities and students in Title I schools, we鈥檙e talking about a significant percentage of their income and lots of money over time.
We really have to make sure that we don鈥檛 just use this as a press release to clap and applaud what鈥檚 happening. We have to actually keep a close eye and make sure that the initiative is really bringing the best-quality products and services to these families.
Outside of learning how to open a bank account and make deposits, what else could a program like this teach?
Oftentimes, students are setting up their direct deposit with a peer-to-peer payment app, such as Venmo or CashApp, and they don鈥檛 actually have a legitimate checking account that鈥檚 FDIC-insured. Those opportunities are incredible to teach students that their paycheck should be direct-deposited into a checking account that鈥檚 FDIC-insured, and teaching them how to learn the differences between types of accounts and systems.
There are products and services that are coming through from fintech (the financial technology sector) that look like a bank account, act like a bank account, and sound like a bank account, but they鈥檙e not bank accounts. They鈥檙e not regulated the same way. They don鈥檛 have the same consumer protections in place. If these apps were to go under, the cash that these students have sitting in their digital wallets would just be gone.
A lot of times, they don鈥檛 understand those differences and nuances. Having a program like this is a really good opportunity for staff to actually get at some of those nuances and help connect the academic learning happening in a financial literacy class with real life banking practices.
What else do districts need to know about effectively implementing in-school banking?
The key is that it does not replace a comprehensive, 21st-century-relevant, high-quality personal finance course.
Going to a bank and opening an account, and not really knowing what the account means or what the interest rate is or what the terms and conditions are, and so on doesn鈥檛 achieve the core mission.
Having the products and the services in isolation, without the education and resources to understand how it fits into a larger financial plan, is missing a lot that students need.
What does the ideal financial literacy course include?
It鈥檚 not just banking. That鈥檚 credit. That鈥檚 taxes. That鈥檚 investing. That鈥檚 how to pay for college. That鈥檚 loans. That鈥檚 insurance. It鈥檚 consumer protection. It鈥檚 the digital economy.
This kind of banking program is a great first step in really making sure those underserved communities are getting extra emphasis to get the banking products and services.
But in addition to that, we need to make sure every kid is getting a high-quality course where they鈥檙e learning everything about personal financial literacy before they turn 18.
Many of these in-school banking programs are intended to support both students and their families. How can districts ensure resources are accessible to parents, too?
A lot of times, parents and students complain that kids are in school all day, and parents get off work when the banks and credit unions are closed.
It鈥檚 really frustrating when you have communities where parents are working either multiple jobs, or they鈥檙e working late hours, or any other situation where the hours don鈥檛 necessarily align with being able to step into a bank institution during the traditional banking hours of operation.
When these programs are designed around the school system, they have to also understand that that means wrapping around the needs of the family and the community. That might mean that you have to have nontraditional hours of operation to support the community.
You have to be not only willing to have a presence in these communities that have higher needs, but also bend over backwards, truly, in order to creatively service them. That鈥檚 the only way that it鈥檚 going to actually succeed.
How does in-school banking affect the broader community?
What you鈥檒l see is parents come in for parent-teacher conferences, and instead of talking about their child鈥檚 behavior, or just how things are going, they are expressing endless gratitude to the teachers because they鈥檙e learning alongside their kid about the things that help boost credit, different investment accounts, the dangers of high interest rates.
They鈥檒l say, 鈥業 didn鈥檛 even know that stuff until I started paying attention to the resources, the homework assignments, or did the tests that my student鈥檚 bringing home from this personal finance course.鈥�
Then, on top of getting educated, they鈥檙e able to immediately take action because they can go right to the credit union or banking initiative in the school and have a direct person to contact and ask for help.
It鈥檚 empowerment because of the education piece, which gives them the language and the knowledge to have the confidence to have the right kinds of conversations in these banking institutions or credit unions.
