Are America's youth financially illiterate?

Many high-school graduates face a rude introduction to adulthood when they find themselves with student loans and credit card debt they cannot repay. Studies have shown that many American high schoolers are not prepared to handle the complex finances that come with adulthood, raising the question of who is responsible to teach them.

The Organization for Economic Co-operation and Development (OECD) recently posted a study showing American students were only average on a 2012 international financial literacy test, falling behind countries like Estonia, Australia, and New Zealand. The study tested 15-year-olds in 18 countries with questions ranging in difficulty, testing students’ ability to distinguish between needs and wants as well as between two loan proposals.

More than 1 in 6 students in the United States did not reach the “baseline level of proficiency in financial literacy,” while only 1 in 10 U.S. students ranked as top performers. Students in Shanghai, China, ranked highest with a mean score of 603 compared to the U.S. mean score of 492.

Michael Davidson, head of OECD Early Childhood and Schools Division, said modern finances are complicated: “Many students have part-time jobs and finance that goes with that, and of course many students will make a choice of going to university, which brings with it issues of finance that they need to juggle and make the correct judgments with.”

The National Financial Educators Council (NFEC) also tested the financial literacy of 2,459 young Americans between the ages 15 and 18 from more than 40 states. They scored an average of 59.6 percent. The NFEC is not a disinterested group because it promotes financial education certification packages, but its results point to a deficiency in American financial education that others acknowledge as well.

Some groups look to public education to correct this deficiency. Nan J. Morrison, CEO of the Council for Economic Education (CEE), said the Great Recession highlighted the “dangers of a financially illiterate society” and emphasized the need for policy-makers and educators to “ensure that students nearing adulthood gain that understanding.”

Others believe the responsibility of raising financially literate adults falls on parents. According to an online poll by the NFEC, of 622 participants, 65 percent said parents have the main “responsibility to teach children about money before they leave home,” and only 16 percent said the responsibility should fall primarily on high schools.

Money management advisor Dave Ramsey has written school curricula, but his most recent book, Smart Money Smart Kids, co-authored with his daughter Rachel Cruze, aims to help parents raise “money-smart kids.” It debuted at No. 1 on The New York Times best-seller list for Advice, How-To, and Miscellaneous.

Cruze said her peers, the millennial generation, lack knowledge when it comes to finance, but she disagrees with calling them “the lost generation.” Ramsey and Cruze go beyond the traditional financial curriculum and focus on underlying character traits, like discontentment, that lead to money troubles. In a promotion for his book, Ramsey speaks directly to parents, telling them, “now is your time to start preparing the next generation” to deal with money.

The Associated Press contributed to this report.