#513: Living the Impossible: Designing Life Happens, an AI-Supported Budget and Justice Simulation

This paper reports on the design of Life Happens, a classroom simulation in which students manage household budgets across twelve months while encountering criminal justice–related financial obligations. Grounded in situated learning theory, the simulation develops quantitative reasoning and perspective-taking through authentic financial dilemmas. Initial prototypes relied on large language models, producing inconsistencies and outputs that reinforced harmful stereotypes. Informed by a trauma-aware framework, the team restructured the system into a three-layer architecture: a deterministic core, a curated event layer, and a bounded AI layer limited to brief affective text messages. This paper focuses on design principles that emerged from documented failures during deployments at a Hispanic-Serving community college and a Minority-Serving state university.