The nationwide survey, sponsored by the Jump$tart Coalition for Personal Finance Literacy and conducted by Lewis Mandell, Ph.D., an economist and researcher who is Dean of Business at Marquette University, looked at 12th graders' level of knowledge within four areas: income; money management; saving and investment; and spending. Students were asked questions on a wide range of topics and concepts, such as taxes, retirement, insurance, credit use, inflation and budgeting.

On average, survey participants answered 57% of the questions correctly -- a failing grade based upon the typical grade scale used by schools (90% - 100% = A, 80% - 89% = B, etc.). The fact that students were able to choose correct answers, on average, more than half of the time was due largely to several questions that tested terminology rather than reasoning ability, said Mandell. For example, 88.7% knew that salaries, wages and tips constituted primary sources of income for most people age 20-35, but fewer than half suspected that if a person's income doubled (from $12,000 to $24,000 per year), income taxes would at least double.

The survey results underscore serious concerns about young people's ability to make educated financial decisions once they're out on their own, said Dara Duguay, executive director of the Jump$tart Coalition, a new, wide-ranging group embarking on a national campaign to address the situation.

Based upon certain trends -- such as rising personal bankruptcies and consumer credit delinquencies, as well as inadequate savings for retirement -- many households appear unable to manage their finances and set good examples for their children, she added. Yet when asked where they learned most about managing their money, nearly 60% of the surveyed students said "at home from my family." Fewer than 11% answered "at school in class."

"Clearly, this demonstrates the need for schools to provide personal finance curricula for the nation's 50 million students in grades K-12," Duguay said. The Jump$tart Coalition wants to increase public awareness that, like reading or math, personal finance management is a fundamental life skill that needs to be taught. The 1997 survey results provide a baseline measurement by which to gauge progress toward the coalition's goal of financial competency among all 12th graders by the year 2007.

In addition, the coalition will use the survey results to fine-tune a set of educator guidelines it has developed to assist teachers. The guidelines -- which received input from a panel of elementary, secondary and high school teachers, as well as numerous other educators throughout the country -- provide a recommended scope of personal finance concepts and topics to be taught in the nation's schools. A copy of the guidelines is attached.

The coalition will seek endorsement of its recommended guidelines from influential policy makers and groups, and plans to create teacher awareness of its guidelines through its Web site (www.jumpstartcoalition.org). To assist schools with curriculum development, Jump$tart will operate a national clearinghouse on personal finance training materials that meet its criteria. The clearinghouse should be operational in time for the 1997-98 school year.

The Jump$tart survey, conducted in March and April, 1997, consisted of a written 40-minute examination administered to 1,509 12th graders from schools across the U.S.

Other survey findings: The average score for Caucasian students was 60.7%, compared with 55.7% for Asians, 55.1% for Hispanics, 50.3% for African Americans and 48.8% for Native Americans. Females averaged slightly higher scores (57.8%) than males (56.7%).

Close to two thirds (62.1%) said they would have no liability if their credit card were stolen and a thief ran up $1,000.

Less than 15% said stocks are likely to have the highest growth over 18 years for an amount of money put away for a child's education, while over half (54.7%) selected a U.S. Government savings bond and one quarter (27.8%) said a savings account.

Over half (51.0%) said a bank certificate of deposit is not protected by the Federal Government against loss. Nearly 20% thought U.S. Savings or Treasury Bonds are not protected.

Nearly a third (30%) said retirement income received from a company is called Social Security.

Over half (54.7%) believe they will be covered by their parents' health insurance until they marry or leave home -- regardless of their age.

Nearly half (46.1%) think they can check their credit record anytime for free. Close to 20% said they cannot see their credit record, or that only the FBI and lenders have access.

Half (50.7%) believe earnings from savings account interest may not be taxed.

Nearly three quarters (72.1%) have a savings and/or checking account and more than one quarter (28.9%) use a credit card (their parents and/or their own).

The Jump$tart Coalition consists of a wide range of organizations, including federal agencies, universities, national non-profit associations and sponsors of education programs which have formed a partnership to launch a national effort geared toward improving personal financial literacy among young adults. The newly formed coalition, a non-profit based in Washington, D.C., has about 20 members and expects to add more over time.