Teaching young people — and their parents — how to better save and spend their money is a critical component to increasing college-going rates in the U.S., warned a panel of experts who spoke this week at the National Association of State Treasurers meeting in Salt Lake City.

According to panelist Margaret Clancy, director of the College Savings Initiative at Washington University’s Center for Social Development, it is not enough anymore for K – 12 students to be financially “literate.” To break the cycle of college-going rates being so directly tied to demographics, said Clancy, we must as a nation concentrate on a broader goal of financial “capability.”

Financial “capability,” in Clancy’s view, is both a step beyond financial literacy and a leap beyond simply having the wherewithal to pay for whatever bills may come one’s way.

“One cannot achieve financial capability without first having achieved financial literacy,” said Clancy. “But financial capability also means having access to safe financial products that are accessible, affordable and easy to use. This access constitutes a certain financial inclusion that allows a young person, and their parents, to be confident that they can achieve their life dreams, without going broke in the process.”

Clancy’s call for financial capability offered a ray of hope in an otherwise disquieting session that focused on the many barriers to college attainment in the U.S., and the very low high school graduation rate that squeezes the college pipeline before it reaches the end of 12th grade.

Striking in the clarity of his remarks on the challenges in the K – 12 system was panelist Dan Domenech, executive director of the American Association of School Administrators, the single largest group of individuals who run public schools and school systems across the country.

“If financial literacy is a necessary step on the path to financial capability,” then we have a real problem,” said Domenech, a former superintendent himself with more than three decades of experience in K – 12 education. “While most teachers are familiar with the term ‘financial literacy,’ their own personal knowledge of it is not well-defined, nor do they rate themselves highly on either the topic itself or their ability to teach it.”

A third panelist, Angela Baier, chief marketing officer of Colorado-based College Invest, added that more than three-fourths of parents in the Rocky Mountain State acknowledge that they are their children’s primary source of personal finance education.

However, Baier said, Colorado parents also note that they feel “less prepared to give their teens advice about investing than they do about sex.”

(Full disclosure: I was the fourth panelist at this event, and I feel ill-prepared to talk to my teens about either investing or sex.)

What is the level of “financial capability” in your family? What is your view on how this problem can be addressed by all the stakeholders in higher education, including parents?