Grants fund ‘financial literacy’ programs

Ten Massachusetts cities this past spring received state grants intended to help high school students develop a better understanding of credit cards, college loans, tax withholdings and other financial matters.

All of the cities – Fall River, Haverhill, Holyoke, Lowell, Lynn, Quincy, Revere, Salem, Springfield and Worcester – are among the state’s designated “Gateway Cities.” The designation applies to midsize cities that anchor regional economies but have struggled due to shifts in the state economy. Their median household incomes and average educational attainment are below the state average.

Each of the “financial literacy” programs, designed to extend over three years, includes partnerships with local banks, colleges or nonprofit organizations.

In Salem, a $13,700 grant helped the high school expand access to an existing financial literacy program. Mayor Kim Driscoll described the program as a means of narrowing the divide between better-educated families and those with less formal education.

At a time when tuition and other annual costs at many universities exceed $50,000 per year, Driscoll said, it is especially important for students to understand how interest rates work. It’s great news when students have the chance to go to college, she said, “but you don’t want to come out with enormous debt.”

Driscoll said the courses also help students understand the importance of reading the fine print in credit card and cellphone contracts. In addition, students were introduced to concepts such as the “Rule of 70” – a means of measuring, for example, the time it would take a fixed-rate instrument such as a CD to double in value.

“Some of the teachers said, ‘Geez, I wish I had known this when I was in school,’” Driscoll said.