WASHINGTON . . .While survey results released today show high school seniors know even less about credit cards, retirement funds, insurance and other personal finance basics than they did five years ago, more policymakers are sitting up and taking notice, said the Jump$tart Coalition for Personal Financial Literacy.

Jump$tart's nationwide survey measured 12th graders' level of knowledge of personal finance basics and compared the results with those from similar surveys conducted in 2000 and in 1997 by the coalition. The researcher for all three studies was Lewis Mandell, Ph.D., professor of finance and managerial economics at the University at Buffalo School of Management.

On average, participants in the 2002 survey answered 50.2% of the questions correctly - a failing grade based upon the typical grade scale used by schools (90%-100%=A, 80-89%=B, etc.) The average scores in the 2000 and 1997 surveys were 51.9% and 57.3%, respectively.

"If there's a bright side, it's that the situation quantified by Jump$tart's surveys has caught the attention of Congress, regulators and others," said Dara Duguay, the coalition's executive director. In February, the Senate Banking Committee held hearings on adult and youth financial literacy. Federal Reserve Board Chairman Alan Greenspan, U.S. Treasury Secretary Paul O'Neill and U.S. Securities and Exchange Commission Chairman Harvey Pitt were among the witnesses.

Earlier this year, President Bush signed the "No Child Left Behind Act of 2001" which makes $385 million in funds available for local educational agencies to use for 27 categories of "innovative assistance programs." The eleventh category consists of "activities to promote consumer, economic and personal finance education." These programs most likely wouldn't have qualified without Jump$tart's efforts to raise awareness about young adults' inability to handle their finances once they leave high school, said Duguay.

"Our hope is that the latest survey results will compel superintendents to place a high priority on funding innovative personal finance education programs when applying for the money," said Duguay.

12th Graders

Support for innovative education is welcome news to Mandell, who believes a major factor affecting the Jump$tart survey results is how the information is taught. More than one quarter (28.8%) of this year's survey respondents had participated in a stock market game, where students "invest" hypothetical money in simulated Wall Street trading. Students who participated in a high-school stock market game scored better on the survey (52.4% percent) than did students overall or those who completed other courses in money management or economics.

Other findings from the survey:

• The average score for Caucasian students was 53.7%, compared with 50.6% for Asian Americans, 44.8% for Hispanics, 42.1% for African Americans and 45.5% for Native Americans. Males averaged slightly higher scores (50.7) than females (49.7%). Students from the Mid West scored higher (53.5%) than students from the North East (50.5%), the West (48.8%) and the South (48.6%)

• The percentage of students who do not use a credit card declined (67.8% versus 69.1% in 2000, 70.8% in 1997). More students have their own card (12.1 %, versus 9.2% in 2000, 7.7% in 1997). In addition, 15.4% use their parents' (versus 18.3% in 2000, 17.2% in 1997) and 4.7% use both their own and their parents (versus 2.8% in 2000, 4% in 1997. Over one third (35.9%) of the 2002 students have an ATM card, compared with 31% in 2000 and 31.5% in 1997.

• Nearly 75% of the students have a savings and/or checking account with a bank. The 25.7% of the students without any bank account scored lower (46.1%) than those who have a savings account (51.7%), a checking account (50.5%) and both savings and checking accounts (50.2%)

• Slightly more than a third (35.1%) of this year's students knew that retirement income paid by a company is called a pension, down from 46% in 2000 and 63.5% in 1997. In addition, 33.3% thought such income was Social Security, up from 30.3% in 2000 and 29.2% in 1997.

• While almost 60% of the students knew that sales tax "makes things more expensive to buy," nearly one quarter (21.2%) thought there was a national sales tax percentage of 5½ %. Seventeen percent thought the federal government will deduct it from paychecks and 3.7% thought the tax didn't have to be paid in cases where income was very low.

• Almost two thirds (65%) of the students said they felt either "very sure" (18.4%) or "somewhat sure" (46.6%) about their ability to manage their own finances. The remaining one third said they were either "not too sure" (24.6%) or "not sure at all" (10.5%).

Founded in 1997 and based in Washington, DC, Jump$tart is a non-profit organization whose 140 partners include federal agencies, universities, associations and sponsors of education programs. The coalition's goal is to ensure that students have skills to be financially competent upon graduation from high school. Jump$tart now has state coalitions supporting its efforts in about half of the states.

A copy of the survey questionnaire is posted on the coalition's Web site at www.jumpstart.org in the "downloads" section. Reporters interested in interviewing Dr. Mandell may contact him at (716) 835-4949.