October 15 is Teachers’ Day in Brazil. However, there is little to celebrate, with public school educators having to put up with horrible classroom conditions (which sometimes include violence) and the worst entry-level salaries in the world. However, as experts warn, valuing professors will be crucial for the success of a new policy that could have a deep (and positive) impact on the Brazilian economy: the introduction of financial education classes at schools.

Starting next year, all Brazilian schools will be required to include financial education in their curriculum, according to new guidelines established by the Education Ministry. The National Standard Curriculum (BNCC) aims to standardize a basic course program in an attempt to diminish inequality in learning opportunities by guaranteeing every student may develop a basic set of capabilities. 

For the first time in Brazil, financial education has been included as an object of study for elementary and high school students. Though guidelines have included the topic as a subject related to mathematics, the BNCC also states it should be approached in an interdisciplinary fashion. 

“It would be possible to develop projects in history classes on the study of money and its role in society, the connection between money and time, taxes in many societies, consumption at historic moments, including current marketing strategies,” states the document. “Besides promoting the development of students’ personal and social skills, these matters may become an excellent context to apply concepts of financial mathematics.”

According to teacher Claudia Forte, superintendent at the Brazilian Financial Education Association (AEF-Brasil), taking an interdisciplinary approach to financial education—as well as other important issues, such as environmental and sexual education—is a way to lure students back to the classroom, offering them practical applications for what they are studying. However, the only way to make sure it is going to work is by making sure teachers are able to pass this knowledge on.

“Schools lost their appeal. They need to bring back their meaning and interdisciplinary subjects do just that. The idea is that students will bring knowledge back to their homes in a tangible way, they become more interested because they think that they are learning something meaningful,” she told The Brazilian Report. 

“First we need to consolidate financial education in the curriculum, then we need to educate the teachers. There’s no point in having it on the BNCC if teachers are not able to deal with the subject. Once they are educated, the subject is automatically included in the course program.”

A country of financial illiterates

It’s hardly news that the lack of good quality education is a severe issue in Brazil, but this becomes even more pressing when it comes to financial education. According to PISA data, in 2015, Brazilian student’s performance in financial literacy was the worst among all countries analyzed: on average, they reached 396 points, versus the OECD average of 489 and China’s score of 566.  

The BNCC is a first step to fill this gap, but Ms. Forte highlights that going any further would require an added push in public policy. The AEF, a non-profit organization run by financial market entities Anbima, B3, Febraban, and CNSeg, offers free financial education material for teachers and students; however, they need approval from municipal and state education departments to implement programs, which sometimes take longer. 

“I believe this is not a priority for all the departments. There are different realities in Brazil and some are very hard. I understand there are schools that have terrible infrastructure, for instance, but we also face resistance or lack of willingness when financial education is not a priority.”

It is true, however, that there has been some push from Brazilian authorities to change this situation, even amid severe education budget restrictions which are hitting universities particularly hard. One example of is the project “Em Busca do Tesouro” (Hunting for Treasure”). 

The Ministry of the Economy and National Treasury have teamed up with Instituto Mauricio de Sousa—the company behind the extremely popular Brazilian comic series “Monica’s Gang”—to create comics about financial education. The project started at the end of 2018, reaching nine elementary schools in the state of Goiás. Now, their goal is to increase the project’s reach to up to 30,000 youngsters in the Federal District. 

A change in mindset

While valid, these efforts may be too little, too late for an entire generation of Brazilians. As of June, 63.4 million Brazilians—or 40 percent of adults—defaulted on their debts, according to credit bureau Serasa Experian. The number is the highest since the data began being measured in 2016. Default levels rose even faster among the oldest share of the population; among senior citizens, indebtedness rose 3.5 times faster than the rest of society within a year.  

The credit reporting agency puts that down to widespread unemployment, but also to bad financial practices. “With a smaller income, people look for financial aid from their relatives as a resource. They also take over loans that compromise their incomes—and that’s why senior citizens get in even more debt.”

For Mr. Fortes, this is also a cultural issue, and tackling the taboo of talking about finances is essential to break this vicious cycle. Including the subject in schools is seen as a first step in this direction. 

“Finances were never something we discussed at a Sunday lunch. Normally, talking about debts would put you in a vulnerable position, parents did not want that. So, the most important contribution of financial education is the development of more conscious adults towards indebtedness, investments, and consumption. It is a change in mindset, it gives people autonomy and freedom of choice. The person who is not free from debts is not free at all”, she says. 

MoneyOct 15, 2019

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BY Natália Scalzaretto

Natália Scalzaretto has worked for companies such as Santander Brasil and Reuters, where she covered news ranging from commodities to technology. Most recently, worked as an Editor for Trading News, the information division from TradersClub investor community.