Low Socioeconomic Students’ Access to Economic Capital and Financial Literacy

Low Socioeconomic Students’ Access to Economic Capital and Financial Literacy

Abstract

In this policy analysis paper, Kingdon’s agenda setting multiple streams framework will be used to analyze a real issue many high schools face across America. Provided in the first part of the paper is a synopsis of Kingdon, which discusses the Kingdon agenda-setting model. Used in the second part of the paper is a Kingdon outline, which analyzes and describes the implications of the policy issue. The Kindgon model will be used to examine how the lack of financial literacy skills leads to massive financial debt for low socioeconomic students across America. The discussion will focus on how the framework can bring attention to the student loan crisis on the national forefront.

  Keywords: low socioeconomic students, economic capital, financial literacy, student college debt, social justice issues, generations of debt slaves

Introduction

  The lack of financial skills further erodes the income gap between the middle- and upper-class, often minorities, which affects their potential financial status. The financial markets have become quite complex and difficult to navigate over the years. Thus, there are numerous financial products and services available for students that were not available even a decade ago. As a result, students are often required to become astute in their financial affairs quickly so as not to become victim to the turbulence of the financial markets when entering adulthood.

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  Because of this current environment, there is pressure on high schools across the nation to graduate students who are financially literate before entering college. Many inner city students take out student loans when entering college because of the rising cost of tuition. According to Goldrick-Rab (2016), our current financial aid system is failing students. Coupled with the fact that many of these students are from low socioeconomic backgrounds, they often view student loans as their only option to getting a college education. However, they frequently have no idea of the ramifications of their upcoming student debt on their financial status.

  As this situation is becoming more prevalent in the United States (U.S.) and Canada, the Ontario Ministry of Education has decided to implement a financial literacy skills course starting at Grade 10 as part of a career studies program (Warren, 2017). Meanwhile, U.S. Senator, Patty Murray, has championed legislation to aid Americans of all ages in becoming more financially informed by giving states resources to teach financial literacy in K-12 school and two-and four-year colleges. However, there is not a unified plan in all 50 states and territories to affect a solid policy formation.

   Synopsis of Kingdom

  The following is a synopsis of Kingdon (2011) where he discusses agenda setting and policy formation at the government level. Kingdon delves deep into the interactions between inside and outside government participants who decide what policy change ends up on the national agenda and what does not. The author further analyzes policy formation through three streams: problem, policy, and political that comprise what he terms the process. These lenses by themselves do little to further national policy; however, when they come together there is a window of opportunity for agenda setting to take place (see Appendix A). Thus, in the following paragraphs, we will discuss how the Kingdon model works.

  As mentioned above, the participants steer the issues that they want on the agenda. Policy is noticed when policy formation is on the rise. However, there are numerous procedures or protocol, which determine whether an issue is agenda ready. For example, if a participant is inside the government, he/she will follow a different protocol than a participant who is outside of the government. The success of the particular participant will also depend upon the importance they bring and the resources that they have available to them. If the participant is inside the government and a member of the administration, he/she can set the agenda themselves and place proposals on the agenda on behalf of important individuals.

  Other inside government participants, such as civil servants, spend more time on alternatives than setting agenda. Thus, Kingdon (2011) did not “find career civil servants to be nearly as influential in agenda setting as the executive branch officials” (p. 30).  Nevertheless, their skills can be useful when building relationships with different types of important interest groups as their familiarity with how the government works is an asset. These civil servants often influence political appointees once they take office through their “wealth of experience in administering current programs” (p. 33).

  It is a well-known fact that Congress’ constituencies can drive the agenda. However, Congress, another inside government participant, goal is to build a good “Washington reputation” (p. 39). Building a good reputation in Washington means that he/she has the necessary expertise to be “taken seriously.” Of course, Congress also wants to drive “good public policy.” They also prod the media to say good things about them. All of these goals are relevant when it comes to reelection and setting good policy.

   As mentioned earlier, a participant who is inside government will act differently than a participant who is outside of government. Kingdon (2011) also discusses how these differences influence what gets on the national agenda. As we will discuss below, outside government participants come from different sectors. These outside government participants include interest groups; academics, researchers, and consultants; media; elections-related participants; and public opinion groups. Another caveat to the participants is that some of them are visible while others are not visible (hidden). The general public is not aware of the hidden participants.

  Types of interest groups include medical associations, unions, and environmentalists to name a few. These interest groups generally work in some sort of activity or capacity to get their policy on the agenda. According to Kingdon (2011), these activities vary depending on the group. For example, the teacher’s union may lobby local officials for tenure and other benefits. Some of the activities may affect the agenda while others may affect the alternatives. Transportation unions “seek to preserve prerogatives and benefits they are currently enjoying” (p. 49).  As a result, unions fight against regulations such as “trucking deregulation,” as it may diminish their power.

  There can be some collaboration between researchers and academics to impact government policy. However, these policies often have already garnered the attention of some politicians. Their activities vary as they often align with alternatives rather than national agendas. Nevertheless, it is important to mention them, as their expertise can be a valuable asset when setting agenda.

  Media has a huge role in driving public opinion. Depending on the topic, media coverage tends to loiter over long periods of time (i.e., September 11, 2001). Often its coverage is one-sided or biased rather than independent, which can lead to inadequate decision-making based on debauched intelligence. Nevertheless, the media seems to be the most sought after way to communicate with the public. Media coverage can work in the favor of groups who do not have the “ear” of government.

  The media also supports positive election results as it provides information to the public in a timely manner. It gives indications on how a particular policy is doing by taking the pulse of the public on issues. During elections, candidates drive the agenda more than the alternatives due to the interactions of participants. After elections, the media often helps to share political agenda based on campaign promises.                 

   Public opinion has a crucial role on agenda setting because it sets benchmarks on what needs to be accomplished. Public opinions can have a positive or negative outcome for the agenda.  Negative outcomes generally are more noticeable than positive because they prompt the government to get involved in the process. While all of this is going on the visible participants, such as the executive administration and Congress, try to react in a positive way. The hidden participants may also be asked to assist in some other form or fashion. When it comes to national policy, visible participants drive agenda setting. All of the above is part of the Kingdon process, which includes problem, policy, political streams, and policy window.

  The problem stream also considers how problems get the attention of various groups. Further, how people define when something is a problem is discussed in detail in Kingdon. Indicators, focusing events, crisis, symbols, feedback, and budgets all determine whether a situation will become a problem that gets national attention. An example of an indicator can be the number of highways deaths across the country. The use of data can help government in its decision to know how to react. However, sometimes indicators do not do the trick. It takes a crisis (i.e., Katrina Hurricane) for government to get involved and provide resources for its citizens. Often citizens will give government feedback through complaints. These complaints affect the outcome of the budget. The budget often determines which problems stay on the agenda and which ones fall off. Conditions do not become problems until determined by the external events that something needs fixing to alleviate the problem or condition.

  The policy stream considers the alternatives. Some policies survive by becoming a member of the “policy primeval soup” (p. 200). Different ideas are exposed to each other whereby some of them combine and recombine to set the agenda. Policy communities consist of types of experts who can help with the forming of the policy that is pleasing to the community and the Administration. There are also policy entrepreneurs who spend most of their time pushing their policy so it remains visible. Their investment or stake in the policy drives or moves the agenda forward.

  Visible (the President) and hidden participants (congressional staff) all have their role in the policy formation. However, a visible cluster of participants like the President or a member of Congress generally do agenda setting. Nevertheless, the congressional staff has the pulse of its constituencies that, as mentioned earlier, drive reelections. Consequently, there is a need for them to listen to citizens in their district about what they feel is vital and pertinent to address.

  The politics’ stream considers the national mood, organized political forces, and government forces. The national mood considers what is going on in “private marketplace”      (p. 146). For example, if the job market is declining, Congress may set the agenda to give incentives or tax credits for businesses to expand. Organized political forces include “interest groups” putting pressure on Congress about upcoming bills. However, there is a balance for Congress to determine where the “balance of support and opposition lies” (p. 151). These key people often drive changing priorities or setting agenda.

  The policy window offers an opportunity for citizens to get their solutions for problems to the proper authority at the right time. Problems receive traction or recognition as the policy community and political groups work together to solve the problem by getting it on the agenda. In conclusion, Kingdon offers a robust framework to analyze student access to economic capital and financial literacy for national attention as examined below.

Kingdon Multiple Streams Framework Analysis

  In this paper, Kingdon’s model will be the theoretical framework for analyzing how policy formation is developed. According to Weiner (2011), as cited in McLendon (2003), Kingdon’s multiple streams framework is one of the most popular frameworks for public policy formation. Thus, it will be used here to analyze the benefits of using its policy formation as a means of solidifying students’ access to economic capital and financial literacy.

  Unfortunately, too few low socioeconomic students have access to economic capital and financial literacy. Involved parents/guardians, along with faculty, and other interest groups, attempt to drive agenda setting at high schools and beyond to encourage the development of relevant and up-to-date lessons as a supplement to the standing curriculum. As such, the importance of a financial literacy curriculum in schools is rising as more and more parents/guardians realize that they do not have the necessary resources to send their students to college. Thus, their students, often forced to look for alternatives to finance their education, turn to student loans. Student loans often lead to “massive student loan debt” (problem stream). Various publications discuss some of the more salient reasons for this problem stream. For this discussion, we will primarily focus on the following publications:

• The implications of predatory lending practices (Fuller, 2014).
• The link between financial literacy and economic behavior defined (Lusardi & Mitchell,  2007); and
• Low socioeconomic students often do not have access to information about financial literacy (Thompson, 2015);

Problems, Policies, and Politics Streams

  As mentioned in the Kingdon synopsis, the multiple streams framework consists of the problems, policies, and politics streams, which forms the process that can encourage the development of a “policy primeval soup.” With various factors coming together all at once, it can be difficult to develop the window of opportunity needed to set the agenda. Thus, solving these socioeconomic problems require a thorough understanding of the impact of financial aid has on “massive student loan debt.”

  Once upon a time, education in America was a social good whereby students from low socioeconomic backgrounds were supported philanthropically. According to Fuller (2014), the history of financial aid evolved away from philanthropy to a complex web of financial aid that is based on the political agenda of the day. This political stream now consists of constraints and government red tape, which has stifled financial aid reform. Special interest groups (i.e., banks) do not want to forgive any loans so they lobby Congress not to do anything. On the other policy stream, the Pell grant and student loan are offered to students, which is not sufficient for student success. In recent times, as a solution to this problem, former political candidates such as Bernie Saunders and Hillary Clinton lobbied for some type of financial aid reform.

  The Regan policy of the 1980’s encouraged the government to shy away from poverty issues and begun to convey to its citizens their obligation to “pull themselves up from their bootstraps.” This philosophy aligns with the “polis” argument, as discussed in Stone (2002), that there is less need to support a college education because it is a public good. In other words, citizens are expected to pay for their own education without support from the government or grants. While this policy was at play, tuition continued to rise at stagnating rates. According to Jackson (2015), the average annual increase in college tuition from 1980 to 2014 grew by nearly 260%.

  As mentioned in Kingdon (2011), “problems are often not self-evident” (p. 94). This also could include the effects of the problem. However, focusing events, crises, and symbols can give the problem the push it needs. For example, presidential campaigns can act as focusing events, crises, and symbols. The presidential election itself acted as the focusing event whereby candidates’ every move was being evaluated at some point, the declining economy often acts as the crisis or catalyst for change, and candidates run on some sort of promise that acts as their symbol.

  During the 2016 presidential election, Bernie Saunders ran on the theme of “free college.” His slogan “feel the bern” resonated with college students and parents throughout the nation. The “feel the bern” symbol represented optimism and expectation for student loans to be forgiven. The symbol gave some of the interest groups, such as parents/guardians and faculty, at the local high school level the opening to lobby school districts across the nation to signal the push for reforming the curriculum to offer financial literacy classes.

  Bernie drove home the point that students incur huge debt when leaving college that is unpaid. Thus, college graduates become debt slaves, which leaves them with a lack of economic capital. Depending on the college major, jobs available after graduation do not do not pay enough to pay off student loans.

  In addition, during Hillary’s 2016 presidential campaign, she too pushed for reform in the form of keeping interest rates low for student loans. She also supported states working together with colleges so that students do not incur student loan debt through cutting costs and awarding grants based on need. Due to the rising cost of tuition and the financial aid policies, college tuition remained on the platform of the presidential election. However, since the election has subsided there seems to be less a push for some sort of reform. Unless Congress members, such as Patty Murray continue to push for reform, “conditions may deteriorate to crisis proportions before the subject achieves enough visibility to become an active agenda item” (p. 94). In other words, it may not get the national attention until the next election. Kingdon said that items that get media attention tend to stay on the agenda. For financial literacy to remain relevant, it needs to be talked about at the local level by other participants such as interest groups (i.e., parents/guardians) at the schools and school district board meetings.

  As suggested above, the Kingdon framework allows other participants, such as parents/guardians and faculty, to lobby the school district by putting pressure on them to allocate funds for financial literacy classes. One of the reasons that makes this framework right for policy formation is that it is set up to help address economic capital issues of the students.  Parent/guardian’s across the nation have begun to talk about these issues to their elected officials or the inside participants. As such, Kingdon works perfectly to address economic capital and financial literacy issues.  It is ripe for being an effective tool to aid parents/guardians and faculty in schools across the nation to shed a light on the ramifications of not having financial literacy taught in schools at the local level.

 As mentioned in Lusardi & Mitchell (2017), nearly all adults feel that financial literacy is important in the U.S. However, what was most profound was the fact that the lack of financial literacy skills often led to poor retirement planning. As a result, lawmakers are most concerned about the economic behavior ramifications. Thus, lawmakers are repeatedly coerced into developing serious legislation for economic capital and financial literacy when problems come to their attention.

 According to Kingdon, for federal government to get involved there must be problem recognition, formatting policy proposals in the proper manners.  Formatting policy proposals in the proper manner will help get problems in the forefront whereby the bureaucrats will develop them for agenda setting. As the Bush Administration was able to start a new agency called Homeland Security due to 911 concerns, high schools can lobby for financial literacy courses to address economic capital by pressuring their local government for funding. This can be done by talking to parents/guardians, faculty, district, school board members, the media, local officials and Congress members. This is all part of the process to get to the goal, which is the window of opportunity for agenda setting.

 Defining clear and concise goals will help to canvass alternatives, achieve goals, and solve problems. Policy proceeds in stages; thus, it is important to define particular goals early in the process. According to Kingdon, if problematic preferences are not defined, in other words, what you want to accomplish is not clear, it can lead to confusion, which can lead to using the “garbage can” approach. This garbage can approach often leads to participants going in and out of the decision-making process. As for the problem being discussed here, this could mean that it may fall by the wayside and have to be revived later, which takes resources and effort.

 As the discussion alludes to, Kingdon can be used to “get the streams” to line up (problem, policy and political) if used probably. If the streams are not lined up, there will continue to be a problem stream that consists of massive debt for graduating college students. In addition, it will be impossible for the political stream to join with the policy or problem stream. According to most lawmakers, this outcome would not lead to “good public policy.”

Recommendations and Conclusion

  As discussed earlier, the primary purpose of this discussion was to analyze the benefits of the implementation of a financial literacy curriculum as a social justice strategy to address massive student debt. According to Senator Patty Murray from Washington, DC, financial literacy is a necessary curriculum that is ready for implementation all across America to address inequities of low socioeconomic households. Individuals, such as Senator Murray, have paved the way for financial literacy to drive the successful transition from high school to college and beyond for the disenfranchised and others. As has been revealed, the forming of a financial literacy curriculum in a high school is a movement, as more citizens are speaking out about the crippling debt that college loans create. We recommend that various interest groups do the following to continue the movement to address economic capital and financial literacy issues for low socioeconomic students that produce massive student debt:

• Policy formation can be directed in the following way to be noticed:
  • Local level.
    • Form interest groups (i.e., parents/guardians, faculty, and school board members)
    • Attend school board meetings to voice concerns about pending massive student debt for the students;
    • Ask that a financial literacy curriculum be offered at public schools; and
    • Contact media.
  • National level.
    • Lobby local and Washington officials to earmark funds to local districts for financial literacy training; and
    • Contact the media.

  If the above is implemented, there could be a window of opportunity created whereby lawmakers would see the issue as a good policy to put the problem on the agenda. However, if the issue is not pushed by the parents/guardians and faculty at the local level, it will continue to stall and not be a united plan in all 50 states and territories.

  As alluded to earlier, a generation of debt slaves will continue to rise if the lack of financial literacy skills is not addressed for the disadvantaged and others. Nevertheless, this situation still has the potential for reconciliation by applying Kingdon’s framework to assist in policy formation. By forming alliances with various interest groups, interest groups are able to effect change. The Kingdon framework articulates the importance of relevant decision-making process when implementing a change. Using the Kingdon as a blueprint to understand policy has the potential to empower parents to be successful in agenda setting.

References

• Fuller, M. B. (2014). A History of Financial Aid to Students. Journal of Student Financial Aid, 42-68.
• Goldrick-Rab, S. (2016). Paying the Price. Chicago: University of Chicago Press.
• Jackson, A. (2015). This Chart Shows How Quickly College Tuition has Skyrocketed Since 1980. Retrieved from Business Insider: http://www.businessinsider.com/this-chart-shows-how-quickly-college-tuition-has-skyrocketed-since-1980-2015-7
• Kingdon, J. W. (2011). Agendas, Alternatives, and Public Policies. Boston: Longman.
• Lusardi, A. &. (2007). The Importance of Financial Literacy: Evidence and Implications for Financial Education Programs. Journal of Monetary Economics and Business Economics, 1-15.
• Stone, D. (2002). Policy paradox: the art of political decision making. New York: Norton.
• Thompson, D. (2015). College- and Career- Readiness Requires a Strong Foundation in Financial Literacy. Council for Economic Education. Retrieved from College- and Career-Readiness Requirres a Strong Foundation in Financial Literacy: http://councilforeconed.org/2015/04/02/college-and-career-readiness-requires-a-strong-foundation-in-financial-literacy/
• Warren, M. (2017). Toronto Metro. Retrieved from Ontario to roll out pilot teaching financial literacy in Grade 10: http://www.metronews.ca/news/toronto/2017/02/13/ontario-to-roll-out-pilot-teaching-financial-literacy-in-Grade-10
• Weiner, S. A. (2011). How information literacy becomes policy: An analysis using the Multiple Streams Framework. Libaries Faculty and Staff Scholarship and Research, 70.

Appendix A

Window of Opportunity (WOO)

Problem

Politics

WINDOW

OF

OPPORTUNITY

WOO

Policy