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US students scored behind Estonia and Poland on this financial literacy exam—try 2 questions for yourself

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Every three years, the Organization of Economic Cooperation and Development (a coalition of some of the wealthiest countries in the world) coordinates a test of students around the world called the Program for International Student Assessment. The so-called PISA assesses 15-year-olds' literacy in reading, math and science. It also includes an optional financial literacy section.

In 2018, 79 education systems, including 37 OECD countries, participated in the PISA. Just 20 education systems, including 13 OECD member countries, participated in the optional financial literacy assessment. 

According to the results of the 2018 exam released on May 7, U.S. students scored behind five other countries including Estonia and Poland. 

Since the financial literacy section was first offered in 2012, U.S. students have consistently performed in the middle of the pack. Most recently, the average score among all OECD countries was 505 and the average score among U.S. students was 506.

Estonia (547), Finland (537), Canada (532), Poland (520) and Australia (511) all reported average scores above the U.S.

"At a moment when Americans are facing tough financial decisions, we are reporting that we aren't making progress preparing students for the realities of economic life as an adult in the modern age," said Peggy G. Carr, associate commissioner of assessments of the National Center for Education Statistics, which administers the test in the U.S., said in a statement. "These are fundamental life skills that are absolutely essential for all Americans, but the study shows that many of our students — roughly one-fifth overall — don't have the skills they need to make prudent decisions about their personal finances and struggle with everyday tasks, like determining the best value between two products at the market and knowing how to respond to a phishing email that looks like it's coming from their bank."

One possible reason American students are not performing as well as policy experts might hope is that most American students say they learn about money outside of school, rather than in the classroom. In the U.S. 96% of students said they learn about money from their parents but just 47% say they learn about money from their teachers. Students in Estonia, for example, are more likely to say they learn about personal finance in school.

"The PISA financial literacy assessment is especially valuable because it is the only nationally representative study in the United States that measures the applied financial literacy skills of the country's 15-year-olds and whether students have the skills they need to be prepared for the variety of financial challenges they will encounter in life as young adults," says Carr. "Whether they go on to college or directly into the workforce after graduation, as young adults they will need to deal with budgeting and saving."

To see how you would fare on the test, check out these two sample questions: 

Sample question 1

Kelly asks her bank to lend her 2000 zeds to buy a music system. 

Kelly has the choice to repay the loan over two years or over three years. The annual interest rate on the loan is the same in each case. 

The table below shows the repayment conditions for borrowing 2000 zeds over two years. 

How will the repayment conditions for borrowing 2000 zeds over three years be different to the repayment conditions over two years? 

Answers: False, True

Sample question 2

Alan wants a mobile phone, but he is not old enough to sign the contract. 

His mother buys the phone for Alan and signs a one-year contract. 

Alan agrees to pay the monthly bill for the phone.

After 6 weeks, Alan's mother discovers that the bill has not been paid.

Is each statement about the mobile phone bill true or false? 

Answers: True, False, False

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