Policy and Practice — December 2011
Expanding Financial Education To Include Students And Families Who Receive Public Benefits
Michael Dalto

Michael Dalto is the Work Incentives project director at the Maryland Department of Disabilities.

The current economic recession has taught Americans many lessons. Perhaps the most important is for citizens to know something about managing finances, living within a budget, and navigating cautiously through the myriad financial products available on the market. While our current economic woes are complex and deep-seated, our troubles would certainly be milder if more consumers had known the hazards of things like subprime mortgages with adjustable rates.

Astute policymakers now promote financial education to help us get control of our monetary decisions. While financial literacy is vital for adults, the best place to begin learning sound financial habits is in primary and secondary schools. Even starting in college may be too late, as students face a dizzying maze of student loans and credit card offers. Children who learn good economic behavior in school tend to carry their skills into adulthood. As Frederick Douglass pointed out, “It is easier to build strong children than to repair broken men.”

Everyone seems to agree that financial literacy should be taught in schools, but little discussion has centered on a key question: Whose needs should be addressed by financial education? Until recently, financial literacy curricula (developed mostly by middle- and upper-middle income educators) have been skewed toward middle- and upper-middle income families. These learning materials focus largely on people with stable jobs who need to plan their expenditures and investments wisely. But what about students whose families live on public assistance, whose parents have lost their jobs, or who receive public benefits due to disability?

Students and families who receive public cash or medical benefits (such as Social Security Disability, Temporary Assistance for Needy Families, Unemployment Insurance, Supplemental Nutrition Assistance Program benefits, Medicare, or Medicaid) are often frightened of going to work or saving money. The rules that govern the impact of earnings and assets on benefits can be very complex and confusing. People who get benefits wonder whether they’ll lose them when they go to work, and whether they’ll be able to get benefits back again if they lose their jobs. Sadly, many decide not to work or save money at all rather than face any risk to benefits they’ve come to rely on for survival. That fateful choice can doom people to poverty and prevent them from becoming financially self-sufficient.

Fortunately, some benefit programs include provisions known as “work incentives” that encourage beneficiaries to seek employment by reducing the impact of earnings on their benefits. Work incentives enable people to keep cash benefits (or even increase them) while they work, to keep medical benefits even if they earn enough to lose cash benefits, and to get benefits back quickly and easily if they later lose their jobs. A couple of work incentives even o er additional benefits for workers that they wouldn’t receive if they were unemployed. These incentives often provide just the spur that people need to start looking for work who would have otherwise never considered it. But they need to know these rules exist.

Until recently, school-based financial literacy curricula mentioned neither public benefits nor work incentives. This year, one national curriculum maker broke the silence. The Take Charge America Institute of the University of Arizona accepted the challenge. The institute publishes Family Economics and Financial Education (FEFE), a web-based curriculum used to educate middle- and high-schoolers in all  states. The Maryland Department of Disabilities and the Maryland State Department of Education asked the institute to collaborate on an e ort to add lesson plans on public benefits and work incentives to FEFE. Institute Director Michael Staten eagerly accepted. “We saw the partnership as a great opportunity to broaden the scope of FEFE and make it relevant to far more students and their families,” related Staten. “By addressing public benefits, the new lesson plans help those a ected by disability, poverty, or the recession to learn that they, too, can work and save to boost their financial independence.” The new lesson plans debuted in classrooms across the nation this fall.

The e ort was resourced through an innovative federal funding arrangement called a Medicaid Infrastructure Grant (MIG). These grants, authorized under the Ticket to Work and Work Incentives Improvement Act, enable states to change their Medicaid and service systems to better support employment for people with disabilities. MIGs have funded a variety of initiatives ranging from the growth of benefits counseling (a service to help workers with disabilities use work incentives to protect their public benefits until they can earn enough to replace them) to a nationwide marketing campaign to encourage employers to hire workers with disabilities. Although MIGs will end in December, Maryland and  other states have used them e ectively to eliminate barriers to employment for people with disabilities.

Catherine Raggio, secretary of the Maryland Department of Disabilities, highlighted the importance of the MIGfunded financial literacy e ort. “Fear of losing public benefits is probably the most persistent and deep-seated obstacle to employment for Marylanders with disabilities. It’s important for students to learn the facts early—that they can work and keep certain essential benefits, at least until they earn enough to replace them. Young students need to learn that it pays to work, that they’re better o financially if they are employed, and that, with the help of the FEFE curriculum, they can help their families understand the facts as well.”

The new FEFE modules open by asking students to imagine themselves in some unexpected situations: that a parent has passed away; that the student has had an accident that prevents her from working full-time; that she has been laid o from a job through no fault of her own; that she is a teen parent struggling to make ends meet while She finishes high school. The lessons detail public programs that can help in each situation. Most important, they illustrate benefits through case studies, including:

. Laura, a wheelchair athlete, who uses a work incentive called the Plan for Achieving Self Support to help pay for her education degree so she can work her way off Supplemental Security Income (SSI) and Social Security Disability benefits, while retaining her Medicaid coverage.

. Calvin, a young single father, who receives assistance through the Temporary Assistance for Needy Families (TANF) program, Supplemental Nutrition Assistance Program (SNAP) and Medicaid. Calvin participates in job training and receives a child care subsidy that enables him to work part time in a computer shop as he prepares for a full-time job, and he gets a tax refund through the Earned Income Tax Credit.

. The Swenson family, who struggle with a greatly reduced income after their father loses his job and receives Unemployment Insurance until he finds another position.

. The Perez family, whose mother is disabled in a car accident, loses her job, and begins to receive Social Security Disability Insurance. She later returns to part-time work, taking advantage of work incentives that protect her benefits for several years until she is able to resume her job full time.

Students prepare budgets for each case study that illustrate the financial impact of sudden income losses, the safety net provided by public benefits, and the fact that people who receive benefits can return to work and be better off financially.

Shelly Stanton, a high-school teacher in Maryland, reported how even students who have had no experience with public benefits can gain from the lesson plans. When she taught the new modules, “Students came to realize that ‘life happens’ and in order to help a family re-stabilize, the government programs are a life saver. They also discussed their misconceptions about government programs and some of their biases and, in doing so, took steps to becoming more well-rounded citizens.”

All FEFE materials are available at no cost. To view the lesson plans on the FEFE web site, follow this link: http://fefe.arizona.edu/downloadlessons/% 20/%20/%20/20.0%20 Receiving. Use this email—mdalto@ mdod.state.md.us and the password— FEFE123. However, simply providing curriculum materials does not guarantee they will be used effectively. The Take Charge America Institute recognizes the importance of teacher education to enable instructors to teach students successfully, and continuing professional development to build educator confidence.

The institute proposes developing web casts and web site support for teachers to use the new lesson plans optimally. The costs will be nominal if shared by a number of states. For more information, contact Michael Dalto, at the Maryland Department of Disabilities at mdalto@mdod.state. md. us or (443) 514-5922.