Is the Value of a College Degree Worth the Cost?
By Dominique Derbigny on 12/11/2013 @ 02:00 PM
Lately we’ve been hearing a lot of folks proclaim that college has gotten so expensive that it is no longer a worthwhile investment. They say that with rising tuition costs and student loan debt surpassing the trillion-dollar mark nationwide, maybe college isn’t for everyone. Yet we know that a college education is the linchpin to upward mobility for many people, particularly for students from low- and moderate-income (LMI) families. Rather than abandoning higher education altogether, we should figure out how to reform the way we finance higher education to make it attainable for students from LMI families. I recently attended two events that explored innovative strategies to address the challenge of paying for college.
At a Hamilton Project event on October 21, 2013, Sandy Baum and Judith Scott-Clayton–authors of Redesigning the Pell Grant for the Twenty-First Century–proposed making major reforms to the Pell Grant program including:
- Simplifying the eligibility and application process
- Providing financial guidance and coaching services to incoming college students
- Providing visible incentives to reward college completion and not just enrollment
The suggested reforms help to promote both college enrollment and completion among LMI students, addressing the current challenges of low graduation rates and a missed opportunity to encourage college going under the existing program.
During the same event, Susan Dynarski, Professor of Education at the University of Michigan, discussed developing an income-contingent student loan repayment plan that would:
- Create a debt repayment system that automatically raises or decreases monthly payment amounts based on earnings
- Forgive any remaining debts after 25 years of payments
- Include an interest rate that adjusts annually over the life of the loan and is not nominally capped
While I’m not convinced about extending the standard repayment period by 15 years, I believe that the automatic nature of this proposed system eliminates the arduous and often daunting process of making changes to student-loan repayment plans each time a borrower has fluctuations in income.
I also virtually attended a Kansas University Assets and Education Initiative event on November 7, 2013, entitled, “Rethinking the American Dream: Education, Student Debt and Asset Building.” William Elliott noted that shifting more of the costs of college to loans has a negative impact on college enrollment, completion and financial health after college particularly for LMI students. Instead, he suggested that asset-based financial aid strategies, like Children’s Savings Accounts, can increase college enrollment and completion rates, as well as lower student debt for LMI students. Not only do savings accounts promote college attendance, but they make it easier for individuals to cover costs and complete their education once they get there.
With persistent differences in the earnings potential of college graduates as compared to high school graduates, it’s clear that college degrees are not going out of style anytime soon. We need to continue to explore ideas for changing the way we finance higher education to ensure that all Americans have an equal chance of attaining this valuable asset.
Asset-Building News Roundup - December 6, 2013
By Veronica Weis on 12/06/2013 @ 12:30 PM
Please join CFED and the Center for American Progress on December 10 from 9:30-11 am EST for a discussion on tax incentives and retirement savings in the Dirksen Senate Office Building, Room SD-G50. This event will address how the tax code greatly encourages retirement savings by high-income earners while leaving behind middle- and lower-income families. The event will also discuss policy reforms that have the potential to expand retirement security for all Americans. Senator Elizabeth Warren (D-MA) will give remarks, followed by a panel discussion and audience Q&A. This event is free, but space is limited, so advanced registration is required. Click here to RSVP via email. Can't make it? Follow along with us on Twitter using #saveforretirement.
On Tuesday, December 17, the BETA Project Team will host a webinar called "Findings from the BETA Project" from 3-4 pm EST. The webinar will explore findings from the Behavioral Economics Technical Assistance Project, a year-long collaboration between CFED, ideas42 and the Citi Foundation. Click here to register.
President Barack Obama directly addressed increasing economic inequality and stagnating mobility in a speech this week in Washington, D.C. As The New York Times notes, "He will spend the rest of his presidency, he said, on “the defining challenge of our time:” reducing economic inequality and improving upward mobility." For the full transcript, click here.
Does your neighborhood determine how far up the economic ladder you can climb? A new Pew study suggests so. The report concludes that neighborhoods play an important role in determining a family’s prospects of moving up the economic ladder. Metropolitan areas where the wealthy and poor live apart have lower mobility than areas where residents are more economically integrated.
From the Assets & Opportunity Network
What happened at the 2013 #AOConvening? At the A&O Network Leadership Convening, Network Lead Organizations learned about salient asset-building issues, built relationships with peers, educated policymakers and decided the future direction of the Network. Whether you attended the conference or couldn’t make it to DC, you can follow what happened in one of three ways here.
New Holiday Campaigns Support Students’ College Dreams
By Michael Chasnow on 12/06/2013 @ 10:00 AM
As 2013 comes to a close, the 1:1 Fund is ramping up its efforts to support the college dreams of low-income children by matching those dreams with savings in the bank.
In San Francisco, the 1:1 Fund is partnering with the Lt. Governor Gavin Newsom and Crowdtilt to encourage San Francisco kindergarteners to start saving for college. Through San Francisco’s universal college savings program, Kindergarten to College, over 13,000 public school students (60% of whom qualify for free or reduced lunch) now have their own college savings account. To date, parents in San Francisco have saved more than $420,000 of their own dollars towards their children’s college dreams. One of the big ways Kindergarten to College encourages families to save and plan for college is by matching the first $100 in parent contributions dollar-for-dollar. With support from Lt. Governor Newsom and Crowdtilt, the 1:1 Fund is raising the needed matching dollars to provide this incentive for every kindergartener that started school this year. Please check out the campaign here.
In New York City, the Children’s Aid Society launched a new College Savers Program at the beginning of October. Designed in partnership with Citibank, ideas42 and CFED, and with initial support from Justin and Lauran Tuck’s R.U.S.H. for Literacy, the College Savers Program already has several families that have started saving toward their children’s college futures. You can learn more about the College Savers Program here, and our efforts to begin raising matching funds to encourage eligible participants to start saving and planning for college.
It’s great to see our newest partner make great early progress, and we look forward to updating you on the future success of all of our 1:1 Fund partners.
What Are We Missing When We Talk About Poverty?
By Alicia Atkinson on 12/05/2013 @ 04:00 PM
As a Psychology major in college I was assigned to take Rotters’ 1966 “Locus of Control” test in my Child, Family and Community class my senior year. The thirteen-item questionnaire evaluates whether you have an “external” or “internal” locus of control. Those who score low, or “internals,” believe that the events in their life are primarily consequences of their own actions. “Externals,” those with high scores, place less importance on their own behavior and believe the events in their life are generally outside of their control.
My score categorized me as an “external,” which Rotter claims could be a sign of hopelessness and even depression; however, when asked to explain the reasons for my responses, I said that I knew the circumstances of our lives did not always come down to how hard we work but rather start simply from where we are born. Children who are born into families experiencing poverty grow up in poor housing conditions, poor education systems, poor health and sometimes violent communities and are more likely to experience poverty in adulthood.
Opportunity Nation recently released their new Opportunity Index which illustrates the strong affect a ZIP code can have on the future of a child. The Index looks at economic, educational and civic factors that contribute to upward mobility and creates an overall “opportunity score” for each county in each of the 50 states. This, as well as similar research, illuminates how much your destiny is outside of your control.
Despite research outlining the stark differences in accessing opportunity in our country, mainstream rhetoric often puts the blame on individuals for their circumstances. While many Americans are quick to point their finger on others, we hardly take into account the opportunity and privilege many of us have accessed in our lives. At the 2012 Assets Learning Conference, Cory Booker opened up the conference and openly acknowledged the privilege in his life, saying, “My dad would look at my brother and I and if we ever got proud, he would say ‘Boy, don’t you dare walk around here like you hit a triple, you were born on third base.’”
Americans are often uncomfortable acknowledging their privilege because we are raised to believe we did it all our own. This might seem like a harmless practice because we want children to believe they are in charge of their own destiny and that their hard work will pay off. (Or in other words, the United States tends to raise “internals.”) However, this philosophy feeds an overall feeling of inherent meritocracy and a deep sense of entitlement that hard work will always pay off and result in success.
Despite broad and deep notions that we have succeeded without assistance, history demonstrates that policy has stepped in to help certain individuals get ahead while leaving others behind. For example, the Homestead Act of 1862, which was one of first government-sponsored asset-building policies, was largely unavailable to African-Americans due to racism and the lack of assets needed to purchase the land being granted. Similarly, there have been historic differences in access to credit and many decades of residential segregation, such as redlining that has decreased equity in housing for families; we see today that homeownership rates for white families are 28.4% higher than the homeownership rates for black families. These policies allowed certain individuals to begin to build wealth, which led to years of intergenerational wealth transfers. New research from the Institute on Assets and Social Policy shows that among individuals receiving an inheritance, whites receive about ten times more wealth from family members than African-Americans.
Although many families and individuals do not want to admit it, their families’ wealth holdings were increased by government-sponsored policies. Acknowledgement of the historical access to asset-building policy is not often highlighted in the mainstream media; rather we are much more likely to hear about people who beat the odds. As long as this dominates the mainstream rhetoric, we will not see the importance of designing policies that allow families to access wealth-building vehicles.
The way we frame and view individuals’ plight into poverty greatly influences how we believe assistance should be delivered. If you believe you hit a triple then you probably find it hard to believe why others can’t do the same and therefore would most likely not support programs that provide opportunities for families to gain financial stability. However, if you can sit and recognize the fortunate events in your life, you may be able to begin to view others’ situation with more compassion and understanding. Policies that support Individual Development Accounts and Child Savings Accounts provide much needed opportunity to low-income families to purchase houses, invest in small businesses and save for education. All in all, we need to start recognizing that none of us do it all on our own.
Small Changes, Real Impact: Applying Behavioral Economics in Asset-Building Programs
By Sean Luechtefeld on 12/04/2013 @ 04:45 PM
Tuesday, December 17, 2013 | 3 - 4 pm EST
Last year, the BETA Project was launched to improve the effectiveness of products and services designed to help people bolster their financial security. In the 12 months since, we’ve worked closely with three organizations to understand a problem in their program, design solutions and test them.
On December 17, join CFED, ideas42 and the Citi Foundation as we discuss findings from this year-long project. During the webinar, speakers will report on the research conducted at BETA Project partner sites, explore the implications of applying insights from behavioral economics to asset-building program design and provide helpful tips on how to incorporate the behavioral perspective into your organization. More information on the project is available here.
- Daria Sheehan, Citi Foundation
- Katy Davis, ideas42
- Matthew Darling, ideas42
- Pamela Chan, CFED
Advanced registration is required for the event and space is limited. Click here to sign up.
If you have any questions, please don’t hesitate to contact Pamela Chan, Senior Research Manager, at firstname.lastname@example.org.
Recap: Big Ideas for Job Creation
By Sean Luechtefeld on 12/02/2013 @ 04:45 PM
EDITOR'S NOTE: Last Monday, the Aspen Institute hosted "Big Ideas for Job Creation," an event at which CFED's Ida Rademacher was a featured speaker. In case you missed it, Aspen sent along this recap of the event. If you were there, use the comments below to share your takeaways!
Aspen Institute: Microenterprise and Job Creation
Just in time for Small Business Saturday, the Economic Opportunities Program hosted an event at the Aspen Institute's headquarters highlighting the role that microbusiness plays in creating jobs, and identifying policies to further catalyze the growth and expansion of these small firms. Don Graves, Deputy Assistant Secretary for Small Business, Housing and Community Development, U.S. Department of the Treasury; and Executive Director of the President's Council on Jobs and Competitiveness, set the stage for the event with his opening remarks. Joyce Klein, the Director of EOP's FIELD program, then facilitated a conversation among Elaine Edgcomb (FIELD), Beth Kregor (Institute for Justice Entrepreneurship Clinic), Ida Rademacher (CFED), Connie Evans (Association for Enterprise Opportunity), and Christy McFarland (National League of Cities).
Key highlights from the event include:
- Microbusinesses are responsible for an estimated 41 million jobs in the U.S., including direct, indirect, and induced employment effects.
- Both our federal tax code and local business licensing requirements inhibit many microbusinesses from formalizing and growing.
- There are opportunities to better leverage existing policies--including the Community Development Block Grant program, state Capital Access Programs, and the Workforce Investment Act--to support microbusiness formation and growth.
As panelist Connie Evans noted, "Part of the policy challenge lies in data that helps policy makers to understand the role that microbusinesses play in our economy. They need to understand the labor market and economic trends of the 21st century, and realize that microbusinesses are and will increasingly be a key source of employment."
The event was funded by the Annie E. Casey Foundation as part of its Big Ideas for Job Creation initiative. The event was covered live by CSPAN, and live-streamed on www.aspeninstitute.org. To view a recorded version of the event, visit the Aspen Institute's web site. Copies of the research papers that formed the core of the discussion can be downloaded at www.bigideasforjobs.org/the-ideas.
Happy Thanksgiving from CFED!
Posted on 11/27/2013 @ 03:00 PM
We wish you a happy holiday and safe travels if you're heading out of town for Thanksgiving!
P.S. Don't forget to support a local small business this Saturday, November 30th.
Eliminating Asset Limits Helps Families Save
By Ezra Levin on 11/26/2013 @ 02:30 PM
Read CFED's new Federal Policy Brief on Asset Limits for Federal Programs.
As Congress debates the Farm Bill, we here at CFED are focused on an eye-glazing phrase: “broad-based categorical eligibility.” That incomprehensible wordsmithing refers to a feature of the SNAP program (formerly Food Stamps) that allows families that receive TANF benefits to automatically receive SNAP benefits. This simplifies SNAP administration, and, crucially, it allows states to eliminate the $2,000 asset limit that would otherwise apply to most families on SNAP.
Raising asset limits is a no-brainer for state administrators who want low-income families to save, which is why 41 states have used this provision to raise or eliminate SNAP asset limits. But this wonderful provision is on the chopping block. The House Farm Bill proposal eliminates “broad-based categorical eligibility,” reinstating the $2,000 asset limit for every state.
Will this really impact families all that much? Yes, it will.
Just as an example, consider the Earned Income Tax Credit (EITC), which boosts tax refunds for low-income working families. Last year, 27 million households qualified for the EITC, with an average refund boost of $2,200.
Now think about what happens if a family decides to save that refund for the future. Currently, in states that have eliminated the SNAP asset limit, families can put that tax refund away for a rainy day without fear of losing public benefits that they need to make ends meet. But without “broad-based categorical eligibility,” families that choose to save that money risk losing their SNAP benefits.
So let’s review the House Farm Bill proposal
While families in most states can currently save without fear, the House Farm Bill reforms will give families two options:
Earn income -> get tax refund -> save your tax refund for the future -> lose your SNAP benefits
Earn income -> get tax refund -> spend your tax refund today! -> keep your SNAP benefits
How is this better than letting low-income working families save for the future without penalty? It’s not. This is bad policy that eliminates state flexibility and stops families from investing in the long-term for themselves and their children.
For more information on asset limits, read our new Federal Policy Brief, which describes how eliminating these barriers to saving can help families that are struggling to get ahead.
Asset-Building News Roundup - November 22, 2013
By Veronica Weis on 11/22/2013 @ 03:30 PM
The Consumer Federation of America will host its 26th annual Financial Services Conference, which will include discussion about new research, new policy proposals, and legislative and regulatory prospects. Click here for more information.
The 2009 federal Recovery Act’s temporary boost in SNAP benefits ended on November 1, cutting benefits for nearly 48 million recipients. To see how the cuts are hitting different parts of the US, check out this NPR piece.
The federal Consumer Financial Protection Bureau (CFPB) began accepting payday loan complaints, which it commits to resolve within 60 days. The Bureau also penalized two non-bank mortgage lenders for reporting erroneous data to regulators. Read more here.
From the Assets & Opportunity Network
The Coalition for a Prosperous Mississippi recently shared news of a report which argues that Mississippi must provide more aid to low-income college students.
According to Catalyst Miami, ten states have banned cities and counties from passing paid sick days, including Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Mississippi, North Carolina, Tennessee, and Wisconsin.
The JPMorgan Chase Foundation and the Cities for Financial Empowerment (CFE) Fund announced the creation of Bank On 2.0, a new effort to create a unified, national approach to delivering safe, affordable banking products and services to low-income and underbanked people through municipal programs across the country like Bank On Chicago.
More Organizations are Adding Financial Capability Services to Workforce Development Programs
By Kori Hattemer on 11/21/2013 @ 03:00 PM
An increasing number of workforce development organizations ranging from community colleges to one-stop employment centers are adjusting their models to include asset-building services, including financial education, credit counseling and access to public benefits. As a testament to this growing interest in integration, over 500 workforce development practitioners, researchers, funders and national intermediaries met in Detroit on November 7-8 to mark the official launch of the Working Families Success Network (WFSN) with an inaugural conference. The 1½-day-long event was packed full of thought-provoking speakers and innovative ideas from experts in the field. Here are a few of my takeaways from these insightful leaders:
- Organizations that have successfully added asset-building services have done so by incorporating it fully into their mission and the way they do business. Financial capability services are not just one-off services provided in a silo; they are incorporated into multiple aspects of an organization and alongside a number of other services. Organizations need infrastructure and support to reach this level of integration, which Central New Mexico Community College President, Ann Lyn Hall, emphasized during one of the workshops.
- Employers are a critical partner in building financial capability in a workforce development setting. In one breakout session, representatives from the National Human Services Assembly, The SOURCE, Goodwill Industries of Greater Grand Rapids and United Way of Chittenden County spoke about projects in which they engaged employers to provide financial education and access to public benefits to their workers. These projects not only gave employees the tools they needed to better manage their finances, they also helped CEOs and HR managers understand the daily financial struggles their low-wage employees face. Also, employees reported feeling more engaged with and valued by their employer, which is another benefit for employers and an additional reason for them to partner in this work.
- Establishing good credit is an important asset-building strategy. Organizations shared that many of their clients come in with negative or no credit histories, which can reduce their employment opportunities and cost them hundreds or thousands of dollars due to higher interest rates. Teaching clients to understand how to use credit effectively and helping them repair inaccuracies or negative marks on their credit reports is an important part of helping them secure stable employment and financial security.
The lead organizations involved with developing the WFSN include Achieving the Dream, Annie E. Casey Foundation, United Way Worldwide, Local Initiatives Support Corporation (LISC), Bank of America, W. K. Kellogg Foundation, MDC and The Kresge Foundation. I look forward to learning more about how this network of leaders will continue supporting and partnering with organizations to find innovative strategies to help working families succeed.
Results of 2013 IDA Program Survey Show Programs See Overall Funding Decline
By Alicia Atkinson on 11/20/2013 @ 11:00 AM
This summer, as an Intern for CFED’s Savings and Financial Security team, I had the opportunity to develop, disseminate and analyze the 2013 IDA Program Survey. The annual survey provides key information regarding the IDA landscape, which CFED then shares with the field. It has also informed the way our organization provides services and supports IDA programs around the country. (Click here to see significant findings from the 2010-2011 IDA Program Survey.) As I expressed in my previous blog post, I believe whole-heartedly in IDAs and have enjoyed the opportunity to help strengthen and support the field. IDAs have great potential to help low-income families build assets and increase their financial stability.
The 2013 survey was fielded online from July 29 to August 16 to the IDA community via direct email messages to IDA programs, email communication to the IDA Network listserv, and promotion on CFED’s website and social media outlets. To incentivize completion, CFED entered practitioners who completed the survey into a drawing for a $100 Amazon gift card. (Congratulations to our winner from the Minneapolis IDA Program!) After outreach and data cleaning was complete, 188 IDA programs were represented in the survey.
The survey results paint a picture of IDA programs that are providing a wealth of services to IDA participants and trying new, innovative ways to engage participants and help them save, while managing the impact of an overall decrease in funding. Here is a summary of the key findings for the 2013 IDA Program Survey:
- Roughly one in three IDA programs has seen an overall dip in revenue in the past year (see figure below). This has increased from last year’s survey in which one in four IDA programs experienced an overall revenue decrease.
- Federal funding (66%) remains the most common revenue stream for IDA programs. Private/Philanthropic (50%) is the second most common revenue stream for IDA programs.
- IDA programs provide a rich variety of wraparound services to participants both in-house or through referrals to other local and community resources. The most common services offered in-house by IDA programs were: credit counseling (58%), tax preparation assistance (51%), homeownership counseling (51%) and rental assistance (42%).
- Programs use innovative approaches to keep participants engaged. This includes assistance with other services, peer support groups, social media such as Facebook and Twitter, and text messages.
- Higher education has become a more frequent savings goal in the past year. Over a third (37%) of programs who allow savings for higher education report that it has become a more common goal for accountholders in the past 12 months. This change in asset focus may be indicative of the difficulty faced by low- and moderate-income participants in finding affordable homes and obtaining mortgages.
Thank you to all the IDA practitioners who participated in the survey! Your thoughtful responses will allow us to serve the IDA field more comprehensively and effectively. Please comment below if there is information about the IDA field that you are interested in learning more about, and we will do our best to include it into next year’s survey.
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VITA Programs Show Increased Accuracy Rate on Volunteer-Prepared Returns
By Kim Pate on 11/19/2013 @ 10:00 AM
EDITOR'S NOTE: Our friends at NCTC sent us the press release below, which shows good news for Volunteer Income Tax Assistance (VITA) sites and their volunteers' training.
CHICAGO, IL – The accuracy rate for volunteer-prepared tax returns during the 2013 tax-filing season increased two percentage points from the previous year, according to a report released Tuesday by the Treasury Inspector General for Tax Administration (TIGTA). The findings of TIGTA’s annual report reflect the commitment of volunteers and the Internal Revenue Service (IRS) to provide quality tax-preparation services for low- and moderate-income taxpayers, according to the National Community Tax Coalition (NCTC).
“Volunteer Income Tax Assistance programs aim for the highest degree of quality and accuracy for every family we serve,” said NCTC President and CEO Jackie Lynn Coleman. “We are always looking for opportunities to improve our efforts, so we take very seriously the kind of feedback that TIGTA provides – feedback that we can put to good use.”
NCTC, a coalition of organizations offering free Volunteer Income Tax Assistance (VITA) for underserved, low- and moderate-income families, is the nation’s third largest tax preparer. The organization works closely with the IRS and members of the community tax preparation field to evaluate and act appropriately upon the findings of TIGTA’s reports on free tax preparation programs such as VITA.
In its report on the 2013 tax-filing season, TIGTA noted its latest audit findings are based on reviews of 39 volunteer-prepared returns from locations across the country – taken from the 2.9 million tax returns filed by all volunteer programs. Over half of those returns were prepared accurately– an accuracy rate two percentage points higher than last year’s. TIGTA notes the limitation of the sample size by describing it as “non-statistical,” meaning that the “results cannot be used to project to the population of tax returns prepared at VITA sites.”
The recommendation issued by TIGTA to address the report’s concerns was to ensure that volunteer tax preparers, quality reviewers, and site coordinators complete intake/interview and quality review training annually. NCTC welcomed this recommendation by the Inspector General, which was also agreed to by the IRS.
The IRS also measures the accuracy of volunteer tax preparation programs and completed a more in-depth and statistically sound review of 339 tax returns to find a 91 percent accuracy rate for volunteer-prepared returns in the 2013 tax season. That internal review was conducted during the tax season and the report, known as the Quality Statistical Sample (QSS) report, was released by the IRS Stakeholder Partnerships, Education, and Communication (SPEC) in August.
“VITA programs across the country have implemented the strongest training and quality control standards to date and continually strive to increase the quality of the services offered,” Coleman noted. “Their tax-preparation volunteers undergo intense training, sometimes taking up to 40 hours, and must pass an annual, comprehensive exam before preparing a single tax return. “
# # #
The National Community Tax Coalition is the nation's largest, most comprehensive membership organization for community-based organizations offering free tax and financial services to low-income working families. The coalition’s network of more than 2,800 members, across the country, is dedicated to strengthening economies, building communities, and improving lives through tax assistance and asset building activities that produce financial security, protect families, and promote economic justice.
Big Ideas for Jobs Event: Entrepreneurship as a Job Creation Strategy
By Katherine Lucas McKay on 11/18/2013 @ 09:45 AM
Next week, CFED’s Chief Program Officer, Ida Rademacher, will join leaders in the microbusiness field at an event highlighting opportunities for policymakers at the federal, state and local levels to support entrepreneurship as a job creation strategy. The event, hosted by FIELD at the Aspen Institute, will feature contributors to the Big Ideas for Jobs initiative, a project that highlights practical, sustainable and scalable strategies for creating career-oriented jobs that are accessible for low-skilled workers.
CFED’s contributed a paper to the Big Ideas for Jobs initiative in 2011, highlighting opportunities to leverage the tax code to spur self-employment. At this event, we will offer a preview of our forthcoming proposal, which is updated to reflect recent policy developments and new research on the challenges that low- and moderate-income entrepreneurs face today.
Rademacher will be joined by presenters Elaine Edgcomb, Strategic Adviser to FIELD, and Elizabeth Kregor, Director of the Institute for Justice Clinic on Entrepreneurship at the University of Chicago. Additional microbusiness experts will join a roundtable discussion moderated by Joyce Klein, Director of FIELD. Discussion will focus on the role that microbusinesses play in creating jobs for LMI business owners and workers, describe progress that has been made toward achieving the Big Ideas for Jobs proposals on entrepreneurship, identify what policymakers and advocates can do next.
The event will take place at the Aspen Institute’s Washington, DC, offices on November 25 at noon EST. Please join us!
RSVP here to attend Big Ideas for Jobs: Entrepreneurship as Job Creation Strategy.
Asset-Building News Roundup - November 15, 2013
By Sean Luechtefeld on 11/15/2013 @ 09:30 AM
Next week, the National Coalition for Asian Pacific American Community Development (National CAPACD) will host a Congressional briefing titled 'Spotlight: Asian American & Pacific Islander Poverty.' The event will take place on Tuesday, November 20 from 11 am-12:30 pm at the Capitol Visitor Center, Room SVC 200-201. To RSVP, email Kevin Sanada.
On December 10, CFED and the Center for American Progress will host a Capitol Hill Policy Forum featuring Senator Elizabeth Warren (D-MA). This timely discussion of tax incentives and retirement savings will take place in the Dirksen Senate Office Building, Room SD-G50. This event is free, but space is limited, so advanced registration is required. Click here to RSVP via email.
New Jersey became the latest state to raise its minimum wage in the absence of a federal effort to do the same. Starting in January, workers in New Jersey will earn a minimum of $8.25 per hour, with an automatic cost-of-living adjustment being assessed annually. Read more here.
Three states - Nevada, Idaho and Connecticut - launched their statewide asset-building coalitions. The Nevada program's website can be found here, while Idaho's is here. Connecticut's website is still under construction, but more information can be found here.
From the Assets & Opportunity Network
The Dallas Morning News yesterday reported that almost one in three children in Dallas County is growing up in poverty. Read more on the Assets & Opportunity Network blog.
The United Way of Greater Houston is hiring a Senior Program Manager for THRIVE, its family financial stability collaborative. Read more and apply here.
Financial Products for Immigrants & Communities of Color
By Emanuel Nieves on 11/14/2013 @ 10:30 AM
Last week, the Association for Public Policy Analysis & Management (APPAM) hosted its annual Fall Research Conference in Washington, DC. For the past four years, APPAM has included a number of panels, roundtables and other sessions that highlight new asset-based research, all of which have played a role in informing the work of the asset-building field. Organized and promoted by the Building Wealth over a Lifetime Working Group, this year’s APPAM conference included fourteen such sessions, one of which was a session I attended on Saturday titled Access to Financial Products and Services for Immigrants & Communities of Color.
The session featured both private and public sector panelists, including Sandy Fernandez of Citi Community Development, Jeffrey Cruz of the Office of Senator Elizabeth A. Warren, Lindsay Daniels of National Council of La Raza, Kathryn Glynn-Broderick of the New York City Office of Financial Empowerment and Kevin Sanada of the National Coalition for Asian Pacific American Community Development. These dynamic speakers came together to discuss how immigrants and communities of color were using and perceiving financial products and services post-recession.
Broadly, the research presented showed that most surveyed communities are actively using mainstream financial services and products, but the extent to which each does varies. Specifically, the NYC Office of Financial Empowerment found that among the three communities surveyed—Mexican, Ecuadorian and Chinese—the Chinese community had a much higher rate of being banked (95%) compared to the others surveyed (43% and 65%, respectively), which is even more surprising given they had been in the country for an average of four fewer years compared with the others. While not as dramatic, these data also showed up in the NCLR/CAPACD presentation; their research found that 90% of Asian-American/Pacific Islander (AAPI) respondents had a bank account, compared with 75% for Latino respondents.
Various factors all played a role in the use of these services for surveyed communities, including location, convenience, fees and perception, but the one takeaway that I found interesting is that for these communities, trust is a major factor in how they go about using financial products. In NYC’s study, a third of Mexican and Ecuadorian respondents cited that they chose to open an account only after an explanation by a friend or relative. In NCLR/CAPACD’s survey, 50% of Latino and 40% of AAPI respondents cited that they would turn to a friend or family member first in the event they needed emergency funds before turning to other sources, such as a pawn shop (13% of Latino respondents, 2% of AAPI respondents), auto title loan (9%, 2%) or payday lender (8%, 2%).
Overall, the session showed that while immigrants and communities of color are using mainstream financial products and services, more can and should be done to bridge the gap that remains. Fortunately, each of the organizations represented during the session are doing innovative work to bridge this gap by gleaning a deeper understanding of unmet community needs.
Where is Opportunity in America?
By Alicia Atkinson on 11/13/2013 @ 10:00 AM
Findings from Opportunity Nation’s Opportunity Index show that a child’s ZIP code too often predetermines her economic future. Last Tuesday, I attended an event hosted by Washington Monthly and Opportunity Nation which celebrated the launch of the new data for the Opportunity Index. The event discussed how we can use the data from the Index to expand opportunity and to ensure states are improving year to year. Speakers included Senator Robert Portman (R-OH), Senator Michael Bennet (D-CO), Harry Holzer (Georgetown University Public Policy Institute) and Sarah Burd-Sharps (Measure of America).
The Opportunity Index ranks states based on sixteen indicators that were determined to measure the “infrastructure of opportunity.” These indicators include not just the basics, such as the availability of jobs, affordable housing and quality education, but also look at civic life and social assets. The Opportunity Index can be used as a gauge for policymakers and leaders to identify areas for improvement and gauge progress over time. For example, in the past few years, Washington, DC, has pushed for higher preschool enrollment and their opportunity score has in turn improved.
The new data shows that the higher the number of disconnected youths and the higher the poverty rate in each state, the lower the opportunity score is for that state. Disconnected youth are youth that are age 16 to 24 that are neither in school nor have employment. They often find themselves untethered to any form of structured society. There are approximately six million disconnected youth in the United States. This costs states—not only in lost tax revenue—but also in higher enrollment rates in government assistant programs. Engaging these youths and getting them on track to building a career will have positive ripple effects that will affect their personal financial security and ideally create a stronger economy overall.
One way to engage these youths is to create a path to higher education. CFED emphasizes the importance of starting to save early for education, especially for low-income families who will often have very few assets to assist their child in paying for higher education. One solution that state and federal policymakers have pursued to support this type of early savings are Children’s Savings Accounts. These accounts help families to save for their children’s future college costs, usually augmented by savings matches and/or other incentives, as investment gains accumulate tax-free. A new report from the Assets and Education Initiative (AEDI) out of the University of Kansas found that low- and moderate-income students that have savings of less than $500 earmarked for college were three times more likely to enroll in college and four times more likely to graduate than their peers.
Expanding opportunity in America needs to be everyone’s priority. Investing in youth creates intergenerational impacts and a more active and robust economy. As Lisa Hamilton from the Annie E. Casey Foundation said in closing the event, “we need to learn from the bright spots and scale them to more spots.”
Interested in reading more about the Opportunity Index? Read this month’s issue of Washington Monthly and learn more about the state of opportunity in the United States.
Spoiler Alert: A 2014 Assets Learning Conference Update
By Kim Pate on 11/11/2013 @ 11:15 AM
I think I speak for my fellow 2014 ALC Planners when I say I’m extremely proud of our progress so far! Here’s an update and sneak peek into what the 2014 ALC has in store:
Title and Dates
We have a title for the 2014 Assets Learning Conference, “Platforms for Prosperity,” and dates, September 17-19, 2014. Conference registration opens with a new 2014 ALC website at assetsconference.org in late Spring.
The 2014 ALC will be in a brand-new hotel, DC’s biggest and most modern conference venue. We are watching, and helping to inform, the design of this new venue and will share details of it soon!
We’ve been hard at work and are happy to say we are 40% towards our fundraising goal. We sincerely thank Citi for its support at the Premier Sponsor level; Met Life, our Marquis Sponsor; and Bank of America and Morgan Stanley, our Emerald Sponsors. We are actively securing more sponsors now so we can reach our goal and offer a discounted rate to attendees. If you are interested in becoming a sponsor, please contact me at email@example.com.
One critical way we will build our program is through a Call for Ideas. We find out about great topics, speakers and formats we should incorporate into the conference from you, and we take your suggestions very seriously. We will be sending out a Call for Ideas in the coming months, so please be sure to complete it and share your ideas.
Attendees asked for more formal and informal networking opportunities in their 2012 ALC evaluations. We listened and are building in some very exciting new ways to meet people and learn what’s working in their communities. More on this later!
Capitol Hill Visits
A key component of the ALC is the Capitol Hill Visits we schedule as part of the conference. In 2014, we will make it easier than ever to engage with lawmakers on the Hill and in federal agencies with a time set aside for these activities. We will let you know more soon.
As in prior years, we will have volunteers for various important roles at the conference, from registration to social media to note-taking during sessions. We may even have some new ideas for how volunteers can be important parts of the conference. Stayed tuned for more information when registration opens.
We have always taken the evaluation of the sessions and overall ALC seriously and used the results to continuously improve the planning and delivery of the conference. In 2014, we will work closely with CFED’s Evaluator, Bill Pate (no relation!), to improve the data we collect and report and be able to get a better sense of the conference’s impact for attendees.
Texas Regional Opportunity Index
By Don Baylor, Guest Contributor on 11/07/2013 @ 11:30 AM
EDITOR'S NOTE: We received the announcement below from CFED Board Member Don Baylor of the Center for Public Policy Priorities in Austin, Texas. The Texas Regional Opportunity Index, or TROI, is an incredible tool for assessing the financial security of familes across Texas and is definitely worth checking out!
On October 23, the Center for Public Policy Priorities (www.forabettertexas.org) launched the Texas Regional Opportunity Index (TROI)—a project of OpportunityTexas— a new interactive data tool and the first and only one-stop-shop for economic opportunity data for all Texas counties and regions.
Pulling together 65 indicators across eight opportunity clusters (Credit & Debt, Family Budgets, Health, K-12 Education, Nutrition, Postsecondary Education & Skills Development, Savings & Assets), the TROI allows various stakeholders to view and understand a larger picture of how individuals and families are navigating these various systems.
A unique feature of the TROI is the extent of state agency data analyzed at the local level and the ability to access regional data across five of Texas’ regional jurisdictions, including Higher Education regions and Workforce Board areas.
The TROI is easy-to-use and motivates communities and policymakers to understand their strengths and challenges while also setting goals and benchmarks against other Texas regions. While data sharing is important in its own right, the ultimate goal of the TROI is driving effective community practice and improving public policy.
We look forward to enhancing the user experience, making periodic updates, and identifying new TROI indicators.
More importantly, we would welcome any feedback from members of the network. Please send your input to Jennifer Lee, our Research Associate (firstname.lastname@example.org).
Tour the New Communications Creative Suite
The Communications team has had a blast over the past year decorating and making the new wing of the office our own. Modeled after collaborative workspaces, we picked modern decor to make the space feel more open and creative. We even found a small business owner in Virginia through Etsy to create the custom letters (bottom left, below).
To make staff more comfortable when they come to the Creative Suite for meetings, we got a pair of green chairs. We paired these with some brightly-colored lockers for storage and a sleek, little table (upper right, above). The best part is that we've added an entire dry-erase wall to help Roberto, our Creative Services Specialist, come up with ideas and play around with new designs.
To make the space feel more like home, we had an awesome team retreat at Art Jamz, a paint-and-drink space in Washington, DC. Each team member created their own painting to frame our new TV (upper left, above). Can you guess who painted each canvas?
To show our love of all things new media, we also found Twitter and design-themed pillows for the two chairs (note the Twitter fail whale). With some recent changes, the move is almost complete and the entire team is together in the Communications wing.
In the DC area? Come by and say hello next time you're in the neighborhood!
How Community-Based Organizations Can Do Business with the CFPB
By David Gragan, Guest Contributor and Stuart Ishimaru, Guest Contributor on 11/05/2013 @ 02:00 PM
EDITOR'S NOTE: This article was initially posted on the Consumer Financial Protection Bureau's blog. Read it here.
So often, the work that we do relies on the knowledge and expertise that community-based organizations provide us. These organizations are our eyes and ears on-the-ground, and they give us feedback on how our work can impact people. We want to make sure that we not only informally include these organizations in our meetings and events, but also offer them the chance to do business with us through contracts.
Like any other federal agency, CFPB procures goods and services through the federal procurement process. We are always seeking the most qualified and innovative firms to do business with us, which include community-based organizations. Typically, these organizations may not use government contracts as a funding source, for various reasons, but we would like to make that option less difficult for them.
We will be hosting a training conference for community- based organizations on how to do business with us on Thursday, November 14 from 10:30 a.m. – 12:30 p.m. The conference will be held in our Washington, D.C. headquarters office and we will have procurement and financial education experts who will walk through the basic steps of federal contracting and what to prepare for. There will be a teleconference line available as well. If you’re interested in attending in-person or by phone, please e-mail email@example.com by Friday, November 8. Please make note of any reasonable accommodations you may need. This event will be jointly hosted by our Office of Procurement, Office of Minority and Women Inclusion, and Office of Financial Empowerment.
In the coming months, we’ll be launching several new initiatives that may focus on financial education and capability programs. We’ll be looking for organizations to work with on these programs, and we’ll be procuring these services through federal contracts. Community-based organizations are encouraged to consider these opportunities. For example, we’ve released a draft solicitation on the “Bridges to Financial Security” initiative. This initiative aims to provide financial education to individuals with disabilities who are transitioning into the workforce, increase their financial capability, and help them take control of their finances.
We want to take full advantage of technology, transparency, open communications, and best practices during the procurement process for these initiatives. That’s why we’ll provide organizations with the resources and opportunities to compete for working with us.
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