GAO pans financial literacy programs
A federal certification would strain resources; some simple approaches help
Creating a federal certification process for financial literacy programs would be challenging, could boost costs and may not improve America’s money skills anyway, a new government report concludes.
A Government Accountability Office review of the nation’s financial literacy efforts found no single approach, technology or method of delivering education on investing, saving, managing credit and other financial topics was most successful.
The report, released today, showed, however, that consumers’ financial behavior could be changed through strategies such as financial incentives or changing default options, like through automatic enrollment in employer retirement plans.
“A federal certification process for financial literacy providers would face certain challenges and potential downsides,” the GAO report said. “Most notably, developing, implementing and operating a federal process for certifying financial literacy providers would involve financial costs and staff resources for the federal agency administering the process.”
The report was mandated by the Dodd-Frank financial reforms measure with the goal of finding ways to improve consumers’ financial decision-making skills. The GAO study concludes Americans should be given a mix of financial education with other strategies to motivate them to make better financial decisions.
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