A Proposal: Financial Literacy -- November 6, 2024

Locator: 48492PERSINV.

Human and Health Services: Financial Health For All Americans (FHFAA).

For all students entering ninth grade, age 14: each student gets a minimum of $1,000 for investment.

• starting in ninth grade, all students required to take a financial course each year of high school;  
• not more than one hour / week mandatory (four hours / month); 
• three hours /month didactic; one hour / month: laboratory or field trips
  
• each student given a minimum of $1,000 for investment purposes
• additional gifts each year optional (10th, 11th, 12th grade) with restrictions
  
• students must open an account with a financial institution of their choice in which this $1,000 is placed
• upon graduation, those students can keep anything over $1,000; any amount in the account less than $1,000 must be returned to the US government (IRS) upon mandatory filing
• seniors committing to federal or state service of some sort (military, public health, teaching) keep the entire amount in their ending account; do not need to repay any of the original gift
• source of $1,000 -- based on parents' income bracket:
• 24% tax bracket or greater: 3% of their parents' income to the student's investment account; parents receive tax credit equal to investment amount;
  
• 22% - 23% tax bracket: 2% of their parents' income to the student's investment account; parents receive tax credit equal to investment amount;
• less than 22% tax bracket: $1,000 for each student but funds come from US government (HHS)
• source of $1,000 -- grandparents allowed to contribute in lieu of parents'
• tax-free distributions from traditional and Roth IRAs.
  

Data points:

• graduating seniors in US: 4 million students 
• HHS budget, annual: $1.631 trillion = $1,631 billion
• up-front: 2 million x $1,000 = $2 billion = 0.1% of total HHS budget
• BRK cash horde: $300 billion
• upfront: $2 billion = 0.6% of the BRK cash horde
• MMF: $6 trillion
• upfront: $2 billion / $6 trillion = 0.03% of total assets in MMFs
• Federal funding for highways, annual: $50 billion
• upfront: $2 billion / $50 billion = 4% 

Cost: due to the payback requirements, in the out-years, once the program is fully established and five years "old," there should be minimal cost to the US government.