An open letter to the CFPB,

I read with great interest the recent WSJ article about how your agency is shifting your focus from regulation to education. I will reserve judgment about whether that is the right decision for an agency set up to protect consumers. The political pendulum swings to and fro between regulation and deregulation and this administration's preference is clearly deregulation. 

Since education is where you are looking to focus, I wanted to provide some advice on how to maximize the impact of a small percentage of your $77.8 million consumer education and engagement budget. Having co-founded Next Gen Personal Finance five years ago, I wanted to share some insights on the best investment that the CFPB can make right now: developing the thousands of personal finance teachers in U.S. high schools. 

Why is this the right investment at the right time? Let me count the ways:

• Leverage. Our research has found that the typical personal finance teacher reaches 100 students per year. Provide a teacher with effective professional development and they will impact thousands of students over their career. Reach a consumer with your consumer education and you reach....one consumer. 
• High school is critical time to reach young people with personal finance education. The biggest decision facing a young person today is their post-high school path. Let's develop and hone their decision-making skills before they make them rather than costly clean-up after they have made them. 
• Proven models. Next Gen Personal Finance, other non-profit providers, as well as some private sector providers have models that work at building teacher confidence and capability in the classroom. For example, our hands-on, in-person FinCamps reached over 3,000 teachers in the past year in all fifty states with consistent ratings of 9.8/10. 
• Cost-effective. A blended program assuming a teacher attends one FinCamp and one online FinCamp annually and a FinCamp PLUS every third year would cost about $400/year or $4 for every student taught. To develop the teachers reaching every high school junior or senior with a personal finance class would mean teaching 3.8 million students. Total cost at capacity = $16 million. Since our research finds that only 1 in 6 students graduates having taken a required personal finance course (and assuming a small percentage take an elective course), the likely cost in the short-term would be in the $4-$6 million range or 5-10% of your total budget. 
  • Our typical one-day FinCamp reaches 50 teachers and costs about $100/teacher.
  • Our three-day residential FinCamp PLUS reaches 40 teachers and costs about $1,000/teacher.
  • Our online FinCamps reach 100 teachers per workshop and cost about $10/teacher 
• More states are passing legislation requiring personal finance education (e.g., North Carolina) but alas...most are unfunded mandates). You only need to listen to two student advocates in Rhode Island, Jack Gecovich and Nick Manzi, to know that developing personal finance teachers will be the key to successful implementing the mandates. 

If you are serious about improving consumer education, there is no better investment you can make now than in developing America's high school personal finance teachers. It's cost-effective, there are proven models, its high leverage and it can make a difference in the lives of millions of young people. 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.