From: U.S. Department of the Treasury <subscriptions@subscriptions.treas.gov>
Date: Mon, Apr 28, 2014 at 8:05 AM
Subject: Remarks Of Under Secretary Mary Miller On Financial Capability At The New York Stock Exchange
To: iammejtm@gmail.com
| Remarks Of Under Secretary Mary Miller On Financial Capability At The New York Stock Exchange
As prepared for delivery on April 25, 2015 and posted on the Treasury Department website.
Thank you for the invitation to participate in today's panel discussion about a topic that Treasury is heavily invested in – financial literacy and education. As many of you know, April is National Financial Capability Month. And I can't think of a better place to discuss the importance of financial capability than in this building – the New York Stock Exchange.
I'd like to use my time today to highlight some of the work the Treasury Department and the Obama Administration are doing to promote financial education and empowerment. We are particularly focused on three key areas of building financial capability, which I will discuss in turn. First, financial education for children and young adults. Second, financing higher education. And third, planning for retirement. These areas of focus support Treasury's efforts to empower Americans across their lifetimes with the ability to achieve economic security and prosperity that is broadly shared.
Achieving this goal is easier when more Americans are financially literate starting at an early age. There is consensus that helping young people master basic financial concepts is important to giving them a foundation to make sound financial choices throughout their lives. Research suggests that hands-on learning is a powerful way to promote responsible financial decision-making.
At Treasury, we recently commissioned a study that examined the effects of providing elementary school-aged children with financial education and access to a bank or credit union with a branch at their school. Our research shows that these students retained increased knowledge and more positive attitudes about their ability to save. This combination of classroom financial education and hands-on experience in managing an account holds promise to help our young people become more informed and confident financial consumers.
Leading public, private, and non-profit institutions are implementing innovative approaches to help young people plan and save for their futures. Yet, there is more to be done.
To that end, the President recently appointed members to the President's Advisory Council on Financial Capability for Young Americans, including stakeholders from local government, higher education, philanthropy, and the financial industry. The Council, which Treasury leads, has charged itself with promoting financial education for children in school; helping young people make informed decisions about financing higher education; leveraging technology and innovation to help young people wisely manage their money, and encouraging our communities to partner with us.
As the Council begins to solicit input and take action, I encourage you to engage with them on how to achieve these goals.
Another priority for the Obama Administration is promoting college access and affordability because higher education is a critical driver of upward mobility for many young Americans.
Over the past several years, the Administration has taken steps to help make college more affordable. Some of these include lowering interest rates on student loans, eliminating bank subsidies and passing on the savings to students, and increasing the maximum Pell Grant award by more than $900.
On a parallel track, the Administration and independent regulatory agencies have made it easier for students and their families to get the information they need to navigate the student loan finance system. For example, the Department of Education has created an easier-to-use financial aid application form and the Consumer Financial Protection Bureau launched a "Know Before You Owe" campaign to make sure that students have information on the true costs of financing a degree.
I am sure it comes as no surprise that too many young people feel they are not able to move ahead in their financial lives because of burdensome student debt. A recent survey found that more than half of young people with student debt were concerned that they would not be able to repay their loans. That is why we are finding new ways to raise awareness about income based repayment programs for federal student loans, which can enable federal student loan borrowers to reduce their monthly payments.
During this tax season, for example, Treasury and the Department of Education collaborated with the creators of TurboTax to incorporate information about repayment plans into their tax preparation software. Through this partnership, thousands of people learned about ways that they or their children can lower their payments. Additionally, the Treasury Department is sending information about these options to more than 20 million Americans with their tax refunds.
Though retirement is often thought of as a late-in-life event, planning for the future should begin as early as possible. In order to encourage savings, the President, in his State of the Union address, instructed Treasury to create a new retirement savings option for working Americans. In response, Treasury is developing the myRA program, which will offer a simple, safe, and affordable way to save for retirement.
Workers will be able to begin saving with a minimum contribution of $25 and contribute $5 or more every payday automatically through payroll deductions. The principal will be protected and backed by the U.S. government. It is intended to be a starter tool, and may be especially useful for part-time or seasonal workers who may not qualify for an employer-sponsored retirement plan. We are encouraging employers to work with us to make this product available to their employees, and we would welcome your support of this effort.
While these initiatives all focus on critical areas of financial capability, we know there is much more work to be done, and we continue to look for innovative approaches. To continue exploring ways to connect more Americans with tools to manage their money, we will soon be launching the Financial Empowerment Innovation Fund. This fund will enable the Treasury Department to assess initiatives that hold promise to expand the financial well-being of low- and moderate-income individuals and families. For example, we may use the fund to examine how students and families can use customized information and data to make better decisions about pursuing a degree and how to pay for it. We welcome your engagement with us on what innovations in financial capability would be productive to study.
Through the Financial Empowerment Innovation Fund and the other programs I've discussed today, Treasury and the Administration are committed to helping more individuals attain the knowledge, skills, and tools they need to soundly manage their finances.
I am encouraged that many of you in this room share our commitment, and I look forward to hearing your ideas on how we can give more people the opportunity to fully participate in our economy and achieve their goals.
Thank you for your time, and I look forward to our panel discussion on financial capability for women and girls.
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Jeremy Tobias Matthews
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