Alabama students manage index funds and Roth IRAs in new AP class

A junior at Hoover High School in Alabama manages his own investments in index funds while sitting in a high school classroom.

Darshan Parmar, a student at the Birmingham suburb school, told his teacher Gerri Kimble that he allocates his part-time job earnings into S&P, QQQ, and VOO funds. When Kimble asked if his parents handled the transactions, Parmar said he did the investing himself.

Parmar is one of the first students nationwide to enroll in the Advanced Placement Business with Personal Finance course. The College Board, which creates AP curricula and administers the SAT, launched the class this year at more than 1,500 high schools.

In the semicircle discussion, other students described their financial strategies. One senior directs 70 percent of his income into a Roth IRA. Another student contributes to a 401(k), and a third invests directly in individual stocks. Kimble expressed enthusiasm when learning that students watch market movements on their own.

The course marks a shift in AP offerings, which typically focus on traditional subjects like English, history, and chemistry. This new curriculum covers management and finance, including how political, economic, social, technological, environmental, and legal factors affect businesses.

David Coleman, CEO of the College Board, stated that the organization created the course because student surveys indicated a desire to turn ideas into jobs. Coleman described business as a core component of the liberal arts, comparable to math and history. He argued that mixing practical skills with theoretical knowledge is highly useful for preparing students for the modern world.

The introduction of this AP class aligns with a wider trend in high school finance education. Thirty-nine states now require a personal finance class for graduation, a number that is four higher than it was two years ago, according to the Council for Economic Education.

Hoover High School, which has nearly 3,000 students and is the largest high school in Alabama, offers this AP class alongside a four-year business academy that includes accounting and entrepreneurship. Students like sophomore Damola Kukoyi take the AP course to boost their grade point averages, as AP grades are often weighted more heavily. Senior Rachel Deschaine, whose father owned a trucking company, said the lessons help her understand how people and companies interact financially. A Federal Reserve paper found that families in states with mandatory financial education made better financial decisions, such as using pandemic stimulus checks to pay down credit card debt. Jennifer Steele, an education professor at American University, noted that youth educated on money management tend to use it responsibly.