The question for 16-year-old Israel Haile went something like this: Analyze the factors that affect take-home pay.
And this: Explain the positive and negative consequences of using credit.
And also this: Critique how risk management protects against financial loss.
What teen knows this stuff? It turns out, Haile did. She didn’t spent a minute inside a personal finance classroom, but the New Tech High junior in Sioux Falls pitted her knowledge against a district-approved equivalency exam last winter and aced it, earning a half-credit toward graduation in the process.
And she’s not alone.
For five years now, the Sioux Falls School District has allowed its high school students a one-time shot at proving what they know about the world of credit card management and checkbook balancing without ever taking the district-offered personal finance course.
They simply have to successfully pass the equivalency exam that covers the content standards required to earn credit in the course.
This week, the Sioux Falls School Board invited the public to comment on its decision to reapply for the waiver and offer the exam for five more years. No one spoke against it, and students such as Haile are glad they didn’t.
She needed a half-credit in economics or personal finance to graduate, but couldn’t get econ at New Tech High and was able to take personal finance only in her senior year.
“For my last year, I really want to focus on the sciences because that’s the field I’m interested in,” she said. “If I tried to fit personal finance in, I wouldn’t have time for the things I want to take. So I looked at the list of classes you can take by exam.”
There are many such offerings in the school district, said curriculum director Sharon Schueler, including algebra I and II, geometry, physical science, biology, chemistry, physics, geography, world history, modern U.S. history, government and Spanish I.
“We might have a ninth-grade student who struggled with algebra I in eighth grade and didn’t get a credit in it even though they have enough skills,” Schueler said. “Now that they’ve buckled down and reviewed during the summer, they can come back, take the equivalency exam and get the credit without having to sit through the class again.”
Students who grow up in families involved in businesses sometimes glean a lot of knowledge about personal finances because of that exposure, district spokeswoman DeeAnn Konrad said.
Balancing books and filling out business plans? They’ve seen that done, she said. Credit cards, checking accounts, car insurance — young people have a lot of exposure to that side of life as well.
“So then they look at the standards on the test and they say, ‘Oh, I know how to do that,’ ” Konrad said.
Or so they think.
Hannah Lamberty, who graduated from Lincoln High School this May, figured her family’s gasoline station business and the times she spent there gave her some insight into the world of finance.
And the truth is, she almost sounds like a Wall Street financier as she starts talking about questions on the equivalency exam.
“They’re trying to get to things like, ‘Make sure your money is your money, don’t spend it frivolously and actively think about how to take care of and preserve it,’ ” Lamberty said.
“So for example, I think a very important skill for kids going to college is, we need to capitalize on our money as much as we can. Understanding loans. Understanding things like, what do we really need to spend our money on? Do we need to spend it on going places, or should we maybe be paying for textbooks and paying off loans or having a job in college?”
Sounds impressive. But the fact is both Haile and Lamberty said they never would have passed the exam if they hadn’t acquired the book used in the class and studied it.
Haile spent lunch periods with the book instead of going to eat. She spent free time with it after school, too. And Lamberty checked out the book, too.
“What I took the most out of the book was the stuff about retirement plans and the stock market,” Lamberty, 18, said. “For kids my age, there’s plenty of confusion about what 401(k)s are, and bonds. Most teenagers’ concept of money is, ‘I put it in the bank and it stays there, or I take money out of the bank and spend it.’ ”
In five years, 21 students in the school district have taken the equivalency exam. Only four, including Haile and Lamberty, have passed.
“They all think they can test out of it because it seems like it would be a common-sense type of test, and it really is,” Schueler said. “But the state sets an 85 percent pass rate, which is very high, a very tough pass rate.”
Students seem more confident in their abilities before the test than afterward, Konrad said.
That doesn’t surprise Haile and Lamberty, who insisted it was the book that gave them their edge.
“I passed it and so that was convenient for me,” Lamberty said. “But I also admit I have a lot more to learn and understand.
“That’s not easy for a lot of kids my age to say. Admitting that you don’t understand, and understanding that we don’t know everything, that’s something a lot of teenage kids have a tough time dealing with.”
How they fared
The Sioux Falls School District wants to renew a waiver through the South Dakota Department of Education that would allow its high school students to earn a half-credit in personal finance. Instead of classroom instruction, a student may take an equivalency exam and earn credit by scoring at least 85 percent on the test.
The waiver has been in place the past five academic years. Of 21 public school students who have taken the exam, four have passed. The breakdown by academic year:
2013-14: Three students completed the exam, two passed.
2012-13: One student completed the exam and did not pass.
2011-12: One student completed the exam and did not pass.
2010-11: Twelve students completed the test, two passed.
2009-10: Four students completed the test, none passed.