By: Katharine Lackey
April 1, 2010
Student-run sites teach importance of saving, good credit
When students at Carter High School in Strawberry Plains, Tenn., forget their lunch money, they don't have to worry about going hungry.
"We're easing them into learning about borrowing money and the responsibilities that go along with that," Raymond says of the experience students receive at the bank, which opened Feb. 16 in partnership with First Century Bank.
"It's just so important because so many people get in trouble financially," she says.
Students across the USA are increasingly getting hands-on experience about the financial sector through banks operating in high schools, and sometimes even in elementary schools.
The first in-school bank opened in 2000 in Milwaukee and today there are several dozen, says Luke Reynolds, chief of outreach and program development at the Federal Deposit Insurance Corporation.
Important economic lessons
The number of credit unions partnering with schools is even greater; there are at least 324 credit union in-school branches that the National Credit Union Administration keeps track of, spokeswoman Cherie Umbel says.
Part of the growth in recent years can be attributed to the recession, says Karen Harris, supervising attorney for the community investment unit at Sargent Shriver National Poverty Law Center. The advocacy group promotes collaborative approaches for social and economic justice for low-income people and communities.
"If you look at what's going on with the economy, I think a lot of people have started to realize how important savings are and to develop that early," Harris says.
So far, about 65 savings accounts have been opened at Carter High School's bank and about 25 loans have been made, with 10 cents of interest due per day, Raymond says. If students forget to repay the loan, the bank sends a student worker to remind them. Students cannot have more than one loan out at a time, and if they take more than 15 days to repay the loan, their future requests for loans might be denied, she says.
Tori Evans, 18, of Corryton, Tenn., works at Carter High School's bank. She says she became interested in the opportunity because she is an officer in her school's Future Business Leaders of America and is planning to study business administration and international business in college.
"It's teaching me I really have to watch what I do with my money and with other people's money as well," she says.
For the most part, the in-school banks look like small branches often found in local supermarkets or Wal-Marts -- signs designate the bank's affiliation, Harris says. Usually a representative of the bank works alongside the students, she says.
Costs are not high
Janine Williams, vice president of marketing at the University of Virginia Community Credit Union, says working with schools is an opportunity to promote financial literacy, an area of weakness in school systems. Her credit union has a branch in a Louisa County (Va.) high school and plans to open one in a Charlottesville, Va., school in fall.
"It fits our vision of improving the financial lives of our members and our community," she says.
The cost of opening a student-run bank is minimal for most schools, Harris says, and usually all that's needed is donated space where the institution can do any necessary renovations and put in counters and equipment. Depending on the space, banks can spend $25,000 to $50,000, she says.
In return, banks can receive credit through the Community Reinvestment Act, which encourages financial institutions to meet the needs of their communities and considers that outreach in its performance ratings of them, Harris adds.
Some of the schools with financial institutions:
* Charlottesville, Va. Albemarle High School will open an in-school credit union in fall, says Matthew Haas, director of secondary education for Albemarle County Schools. Students and faculty will be able to open checking and savings accounts, and students working at the branch will receive internship credit and be paid as employees of the University of Virginia Community Credit Union.
*Middletown, Del. Appoquinimink High School partnered with Wilmington Trust to open its student-run bank a month ago, Appoquinimink School District Superintendent Tony Marchio says. He says the district plans to open a bank at a second high school by January.
Rebecca DePorte, senior vice president of personal financing at Wilmington Trust, says it's important to get people learning about finances when they're young. "We see what happens when people don't have that background and the challenges it can create," she says.
*Appleton, Wis. Jefferson Elementary School opened an in-school credit union staffed by fifth- and sixth-graders in December, says Rick Sense, senior vice president of government and community relations at Community First Credit Union, the school's partner. So far, 125 savings accounts have been opened.
Lackey works for The News Leader in Staunton, Va.