children’s savings accounts a national perspective...a national perspective indiana philanthropy...

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Children’s Savings Accounts A National PerspectiveIndiana Philanthropy Alliance – Promise Indiana Deep Dive Day

February 23, 2017

Carl Rist, CFED


Our mission at CFED is to make

it possible for millions of people to

achieve financial security and

contribute to an opportunity economy.

Who We Are


How do we do it

We push to expand innovative practical solutions that empower low- and moderate-income people to build wealth.

We drive policy change at all levels of government.

We support the efforts of community leaders across the

country to advance economic opportunity for all.


▪ Many students feel like higher education is financially out of reach▪ Children from low-income households have lower expectations of completing

college than higher-income peers

▪ Paying for college is a struggle▪ 97% of college students from low-income families still have unmet financial needs

after receiving financial aid

▪ Nearly half of young people without a four-year degree report that they're not in school because they can't afford college

The Challenge

Sources: Zena Mello, “Racial/ethnic group and socioeconomic status variation in educational and occupational expectations from adolescence to adulthood,” Journal of Applied Developmental Psychology 30, 4 (2009): 494-504.

Lauren Walizer, Barriers to Success: High Unmet Financial Need Continues to Endanger Higher Education Opportunities for Low-Income Students(Washington, DC: CLASP, 2015).

Is College Worth It? (Washington, DC: Pew Research Center, 2011).


Too many young people miss out on a college education

The Challenge

Source: Indicators of Higher Education Equity in the United States. (Washington, DC: The Pell Institute, 2015).

▪ Less than 1 in 10 young adults from low-income households have a bachelor's degree by their mid-20s


▪ Raising kids' educational expectations

▪ Enabling them to build college savings

Children’s Savings Accounts (CSAs) Can Help By…


▪ Long-term savings or investment accounts for children (0-18)

▪ Usually used for postsecondary education (or other asset purchase such as homeownership or entrepreneurship)

▪ Provide incentives to build savings (e.g., seed deposit and matches)

▪ Account withdrawals are restricted

What are CSAs and how do they work?


What Impact do CSAs Have?

Graphic designed by CFED; data source: Emily Rauscher and William Elliott, Building Expectations, Delivering Results: Asset-Based Financial Aid and the Future of Higher Education, Center on Assets, Education and Inclusion, University of Kansas, 2013.

http://aedi.ku.edu/sites/aedi.ku.edu/files/docs/publication/CSA/reports/Full-Report.pdf


• Increases parents’ expectations for their children’s future

• Improves socioemotional development in young children

• Lowers symptoms of maternal depression

What Impact do CSAs Have?

Source: Sondra Beverly, Margaret Clancy, and Michael Sherraden. Testing Universal College Savings Accounts at Birth: Early Research from SEED for Oklahoma Kids (St. Louis, MO: Center for Social Development, 2014), https://csd.wustl.edu/Publications/Documents/RS14-08.pdf.

https://csd.wustl.edu/Publications/Documents/RS14-08.pdf

Where are CSA Programs?

▪ME Alfond College

Challenge

▪NV College Kick Start

▪RI CollegeBoundbaby

State CSA Programs

Municipal CSA Programs

Private CSA Programs

▪San Francisco (CA)

Kindergarten to College

▪St. Louis (MO) College Kids

▪Lansing (MI) SAVE

▪“I Have a Dream”

Foundation (NY, CO, IA)

▪ Inversant (MA)

▪Promise IndianaUpdated July 2016


What do CSAs Look Like?Harold Alfond College Challenge (Maine)

▪ Launched in 2008

▪ Run by Alfond Scholarship Foundation in partnership with Finance Authority of Maine

▪ Target population – every baby born in Maine

▪ $500 automatically invested on behalf of each baby in 529 college savings account

▪ Impact to date▪ $30 million invested on behalf of 60,000 Maine babies


▪ Launched in fall 2015

▪ Target population - every kindergartner in St. Louis public and charter schools

▪ Automatic account opening

▪ $50 initial deposit

▪ Other incentives:▪ Savings matches ▪ Bonuses for perfect weekly

attendance

What Do CSAs Look Like?College Kids (St. Louis, MO)


▪ Launched in early 2016

▪ Vision: To ensure every child in Oakland graduates high school with the expectations, resources, and skills to complete college and be successful in a career.

▪ Components:▪ Promise scholarships – up to $1,000

per year at 2-year colleges; up to $4,000 per year at 4-year colleges

▪ Brilliant Baby – two-generational asset-building program for babies and their parents in low-income households participating in home visiting program

▪ Kindergarten to College accounts with $100 seed and matches.

CSAs with a Promise: Oakland Promise


▪ St. Louis Scholarship Foundation▪ Long-time provider of scholarships and no-interest loans

▪ Added two cohorts of savers recently; linked to Missouri 529 Plan

▪ Oakland Promise▪ New “Promise” program launched in 2016

▪ Will add accounts for kindergarten students and targeted newborns in 2017

▪ Forman Acton Scholars (Salem City, NJ)▪ Forman Scholars scholarships for graduates of Salem City High (by application)

▪ Acorn Fund – broad-based initiative to create and invest in CSAs for all Salem City youth

▪ “I Have a Dream” Foundation▪ Well-known college access program nationwide

▪ Added a savings component at several affiliates (New York City, Des Moines, Portland)

▪ Kauffman Foundation's KC Scholars

Model Programs that Link Saving and Scholarships


Why is Promise Indiana So Important?

▪ One of few small-town models of CSAs

▪ Success at parental and community engagement is model for CSAs nationwide

▪ Most successful model of program replication at state-level

▪ Promise Indiana leadership play important role in national CSA strategy discussions


▪ Automatic enrollment

▪ Universality

▪ Public sector support

▪ Multiple funding sources

▪ Matched savings opportunities

▪ Progressive incentive structures

▪ Multiple deposit options

▪ Family and child engagement strategies

Program success factors

Investing in Dreams cfed.org/programs/csa/investing_in_dreams.pdf

CSA Resources

CSA Information & Directorycfed.org/programs/csa

Campaign for Every Kid’s Future –Resource Pagehttp://savingsforkids.org/resources

http://www.cfed.org/programs/csa/investing_in_dreams.pdf

http://www.cfed.org/programs/csa

http://savingsforkids.org/resources


Join today to help achieve our vision of 1.4 million Children’s Savings Accounts

by 2020!

Go to savingsforkids.org

Join the Campaign for Every Kid’s Future!


Carl Rist

Senior Director, Children’s Savings & Senior Advisor, Asset Building

CFED

919-246-4236

[email protected]

@carlrist

Contact

mailto:[email protected]