[THE VIEW]Mandatory High School Credit in the US: "Financial Literacy"

Capital Income to Support the 100-Year Life Era
The Future Depends on Financial Education

According to Standard & Poor's (S&P) 'Global Financial Literacy Survey (2014)', the average financial literacy in South Korea was found to be below the global average.

By country, there is a positive correlation between the OECD's Programme for International Student Assessment (PISA) math skills and financial literacy, but South Korea ranks high in math skills while being classified in the lower tier for financial knowledge. In a relatively recent OECD survey (2020), South Korea also scored at or below average in most categories.

It is obvious in the capitalist era that higher financial knowledge leads to a better life. When borrowing money, one can understand various methods and make optimized choices for the individual, and through analysis of new investments, seize opportunities. Conversely, those lacking financial literacy tend to make short-sighted decisions, which can lead to long-term debt struggles or losses from poor investments.

The United States has already recognized and responded to the issue of financial literacy. In Oregon, where the author resides, a bill was passed last June requiring students to take personal finance classes and earn credits as a mandatory condition for high school graduation starting in 2027. Similar laws have been passed in 24 other states, and most states specify providing financial literacy classes directly or integrating them into other subjects.

This approach improves indirect welfare by providing financial education at a young age so that individuals are sufficiently prepared when entering society. Beyond broad education, more direct and efficient educational methods are also being offered to college students majoring in finance-related fields. More than 150 universities or graduate schools already run programs called 'Student Investment Funds,' where students directly manage part of the university's endowment or separately allocated funds as part of classes or activities.

In the case of classes using virtual assets, behavior often differs from when actual money is invested, limiting their effectiveness. Therefore, students learn about the overall financial market by managing real money and reporting to the fund's board, covering topics such as investment product selection and portfolio risk measurement. Domestically, only KAIST operates a student investment fund, and other universities have little comparable activity. Additionally, programs like 'Angel Investing Funds,' where students analyze, negotiate, and invest in startup companies with real money, are emerging.

Human working hours to earn income are limited. In the era called the 100-year life, the burden of the period after retirement, when earning money through labor becomes difficult, inevitably increases. Therefore, capital income through financial markets will become even more important, and basic financial education must be provided to prepare adequately, offering future investors more systematic and practical support.

Seonggyu Park, Professor at Willamette University, USA