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.
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.
Lessons From UNICEF on Halloween: How Small Donations Can Support Big College Dreams
By Andrea Levere on 10/31/2013 @ 10:00 AM
EDITOR'S NOTE: This article originally appeared on the Huffington Post and you can read it here.
My earliest experience with charity was collecting pennies and nickels in my orange UNICEF box on Halloween. Even as a child, I remember how important it felt to pick up my box at school. I relished watching those coins drop into the UNICEF box as much as I delighted in the candy filling my trick or treat bag. For me, Halloween became as much about helping a needy child in a distant country as counting my sugary Halloween bounty.
Today, as an adult who tries to count how much candy I don't eat, I spend a lot of time thinking about how we can leverage charity in the United States in more effective ways -- to not only provide help to the hungry and homeless but to set struggling children and families on a permanent path out of poverty. Unlike the faraway kids who benefited from UNICEF, these children reside in our own cities and towns, in neighborhoods where hopes and dreams are too often halted by the knowledge that opportunities available to children in high income families are not available to them.
In fact, from the time they are very young, many low-income children (and their parents) assume that the best ticket out of poverty -- a college education -- is prohibitively expensive and therefore not a realistic option.
Such thinking is all the more tragic because with very little effort, each of us has the power to change that scenario. New research shows that low-income students with just $500 or less in college savings are three times more likely to enroll in college and four times more likely to graduate than those without a savings account.
Of course, even saving a small amount is challenging for families who in a given month may have to choose between paying the heating bill and putting food on the table.
That's where we can help.
My organization recently developed an online platform called the 1:1 Fund that allows donors, large and small, to help low-income families save for college by matching their contributions in special children's savings accounts. During the past few years, a growing number of cities and states have launched programs that provide students with children's savings accounts, seeded typically with $50-$100 and earmarked specifically for college. Through the 1:1 Fund, donors help young students and their families grow those accounts with dollar for dollar matches.
The accounts give low-income families the confidence that post-secondary education is a real and attainable goal -- and the incentive to plan and save. Once they know college is possible, students are more likely to take the right courses and exams, win the best scholarships and learn about other forms of financial aid.
They are students like La Terra Cole, a former foster child who participated in a financial education and matched savings account program called the SEED Initiative and is now in her third year of law school at Catholic University in Washington, D.C. "The account gave me a new way to think about the future. I wouldn't have to be defined by poverty," said Cole. "We need to build in a culture of college expectation and then enroll kids in programs like the one I participated in. Less than 3 percent of kids in foster care go on to complete a college degree so we need programs on a larger scale."
Encouraging families to save can also significantly help decrease college debt. Currently, less than 10 percent of students from low-income families graduate from college by their mid-twenties, in large part because they lack the savings to help make up the difference between financial aid and the full cost of tuition. Again though, even a small amount of savings can pay big dividends. Studies show that just $23 a month in a children's savings account grows into $16,000 in savings by age 18, significantly decreasing the burden of college debt.
It is rare to be able to draw such a clear line between charitable dollars and genuine impact. So this Halloween, particularly as UNICEF boxes have become a less common sight, perhaps we should all make a commitment to contribute a few dollars a month to help send a child to college. After all, every child deserves a chance at a real future, but without our help many won't get there.
Redesigning the 1:1 Fund Website
By Kristin Lawton on 10/29/2013 @ 11:16 AM
Last week, CFED launched a new website for the 1:1 Fund - our social venture that matches kid's college dream dollar-for-dolla. Here is the inside scoop on the process of redesigning the website. (Note: Click on the image to see the full size; click again to enlarge the image.)
Check Out the New and Improved 1:1 Fund Website
By Carl Rist on 10/23/2013 @ 09:00 AM
We are very excited to announce the launch of our new website for the 1:1 Fund and invite you to take a look! The 1:1 Fund is a CFED platform that supports the college dreams of low-income children by ensuring that those dreams are matched with savings in the bank. The 1:1 Fund has learned a lot in our first year and we’re striving to create a more interactive, easy to share and exciting platform to match kids’ college dreams dollar for dollar.
Visit the new website to:
- Get the latest updates, read savers stories and donate to a program in your area all from our dynamic program pages.
- Learn about the impact of child savings programs.
- Stay current on what's happening at 1:1 Fund and in the world of children's savings accounts on our blog.
The 1:1 Fund team hopes you enjoy our new website and visit often to see how our child savings programs are doing! Also, if you have any feedback or comments on the new website, our team would love to hear from you.
SF Savers: College is Part of “How to Have a Fun Life” for Barry and His Son Jaray
By Claire Sorrenson, 1:1 Fund on 10/21/2013 @ 01:30 PM
EDITOR'S NOTE: This story originally appeared on the 1:1 Fund blog, which you can read here.
Jaray Perkins, an energetic kindergartener at Sherman Elementary School, loves riding his bike and doing sports as diverse as martial arts and rock climbing. When it comes to school, “you have to drag him away,” according to father Barry Perkins.
The landscape of education has changed a lot since Barry’s youth. “College is way more expensive than when I went.” In fact, Barry calculates that his son’s preschool cost more per semester than his college undergraduate degree. But, says Barry, “I believe in planning” now for Jaray’s future education.
Barry highlights the importance of setting early expectations for his son. “We talk about your choices as an adult and how you can have a fun life.” A fun life means having the freedom to make choices, which means having a job that allows you that freedom. Says Barry, “we talk about how you have more options” with a college degree. Barry definitely sees college in Jaray’s future. For Barry, it goes beyond surviving in today’s economy: “college is a good place to figure out what you do and don’t like.”
The 1:1 Fund Expands to New York
By Carl Rist on 10/14/2013 @ 01:30 PM
The 1:1 Fund team was honored to attend an energizing event on October 1 at the Children’s Aid College Prep Charter School in the Bronx that marked our first expansion beyond the 1:1 Fund’s initial two pilot sites (San Francisco Bay Area and Mississippi). With kindergarteners, their parents and a special guest appearance by NFL star, Justin Tuck, and his wife, Lauran, we celebrated the launch of the College Savers Program.
This new and innovative children’s savings program, developed in partnership with Citibank, ideas42 and CFED, and with initial support from Justin and Lauren Tuck’s R.U.S.H. for Literacy, will initially work with 170 children, including 1st and 2nd graders in CAS’s College Prep Charter School and youth participating in CAS’s African American Male Initiative. By the launch, 135 families (or 79%) had already signed up. All participants will receive a Citibank savings account with a $100 initial gift, along with a dollar for dollar match up to the first $100 in savings, a $50 incentive for parents that enroll in automatic bill-pay to contribute to the account and eligibility for raffle prizes by making deposits.
The most exciting part about the launch was the announcement by the Tucks of their $100,000 investment in the College Savers Program (via the 1:1 Fund) and their conversation with parents about their own experiences and their hopes for all of the children in the program. Justin Tuck noted that he and his wife are both fortunate to be Notre Dame graduates and that they want participants “to have the same opportunity we had.”
Since studies show that low-income students with just $500 in a college savings account are three times more likely to enroll in college and four times more likely to graduate, starting to save during the school years is a big step in seizing that opportunity. And it’s also about creating a vision for the future. As Justin Tuck noted in his final remarks at the event: “I believe in you guys and hope you believe in yourselves. I’m your fan, too!”
To see more photos from the event, check out the slideshow below.
San Francisco Saver Story: Teaching Cole to Save
By Blanche Brown on 08/27/2013 @ 01:00 PM
EDITOR'S NOTE: This post originally appeared on the 1:1 Fund blog, which you should check out here.
Lauren Sigurdson is the mother of Kindergarten to College (K2C) Saver, Cole Basowski. The family received the K2C Steady Saver Award, which is given to families that save at least $10 for 6 months in a row. A San Francisco resident for twenty-five years, Lauren lives in the Inner/Outer Sunset neighborhood.
Please tell us about your Kindergarten to College student.
Cole just turned six. He is a special needs child and has a sensory processing disorder. He attends Lakeshore Elementary, which has a great special education program. He is very happy there and just a happy kid in general. He loves taekwondo and is very friendly. We live a block away from the Golden Gate Park. We love to go on the trails together. I am a single parent but have yet to receive any child support. So, this program really helps me.
Could you describe a typical weekday, from when you wake up to when you go to sleep?
In the morning, Cole plays with his cat. And then I walk him to school and I go to work. I work as a sales and marketing coordinator for a software company that sells to HR managers. I do a lot of planning and graphic design. We are a smaller company of about fifty people. Then, when I get off work, we go home. On the weekends, we try to ride our bikes and we go to the zoo a lot. Cole likes to make things so we do a lot of crafts.
How did you first hear about the K2C program?
I first learned about the program from a flyer that was sent home in Cole’s backpack. It was very comprehensive. I scanned it and emailed it out to my family almost immediately. They try to help us out when they can and I thought this account would be a great [way] for my family to consolidate the money they had been putting aside to help us. The matching program was a huge incentive. I don’t want to give away free money, especially when we don’t have a lot to go around. Kindergarten to College is really clear and easy to understand, which helps me and my family take action.
Are you an active saver? If so, why?
Yes, I’m an active saver through the automatic direct deposit I set up. I give ten dollars from every pay check. I wish I could do more. I only make ten dollars over the limit for what you need to be in the free lunch program, which is frustrating but it is good to see that you all give more money to those in the program. It is difficult for me to afford to stay in the city and rent a place. We just moved to a smaller place, but things are close. We don’t do things like go to the movies. But, I really want to stay in San Francisco so Cole can stay in this great school and so we can continue to be in this program.
What were your initial reactions to the program? What drew you to start participating in K2C?
My initial reaction was, ‘Oh, I have to share this with my family.’ I acted pretty much immediately after reading the flyer. I knew I had to take advantage of what’s being offered. It is a really good and important thing that is being done.
Were you nervous about any aspect of the K2C account?
I don’t think so. I just wanted to know more about how the program will develop in his other years in school. I didn’t have any trepidation though. It seemed clear to me.
These days, saving is difficult for many families. How do you make savings a priority?
It is hard being a single mom without any child support. I have to rely on my family. I don’t think ten dollars a month is the difference between food and not food. So, I contribute that. At one point, I was worried I would have to take Cole out of Taekwondo because of the costs. But my family always comes through. It is the same with the K2C account. When it is something important like this, we find a way to make it happen.
How do you think K2C will make a difference in your child’s education?
It will definitely give him the possibility of going if he decides he wants to go to higher education. He may be a special needs student but he is very smart and creative. He could design a new vacuum cleaner or something. I want this option to be available to him. This is an opportunity that I just couldn’t provide on my own.
What can your child learn from being part of K2C?
He can do a little bit of math now but I don’t know if he would fully comprehend what the program is or means. Cole can seem very creative but he wouldn’t understand what a lot of his peers do. Although I don’t know if the other kids in his grade know about the program either. He does understand getting his allowance of one dollar a week and saving that; he kind of hoards it. He always wants me to pay for things so he doesn’t have to touch it. He likes that his wallet is filled up with dollar bills.
Any advice for other K2C parents?
I would say take full advantage of every aspect of the program. They shouldn’t be missed. I can’t afford not to and I think it is kind of crazy for anyone to pass up this kind of opportunity.
When you were growing up, did you have any experiences with saving?
I had a bank account I was not allowed to touch. I knew not to ask for things or ask about the account. We didn’t have that much money. My mom showed me how to write a check and taught me about how banks worked. I didn’t have a lot of experience but I did know that if I wanted something I would have to save up my allowance and get it myself. It takes time. There isn’t that instant gratification that I think a lot of kids these days are used to. They don’t know how to save and work towards something. For Christmas, my parents bought Cole an iPad mini. And one of the first words he learned to read was “free” because he knew those were the games he was allowed to get.
Catching Up With SEED Saver La Terra Cole
By Veronica Weis on 07/19/2013 @ 10:30 AM
We last saw La Terra Cole at the 2012 Assets Learning Conference in Washington, DC when she shared her incredible story in a savers plenary with Under Secretary of Education Martha Kanter and two other savers. I caught up with her recently to hear about her upcoming law school graduation and other thoughts and advice she might have for aspiring college savers and those interested in the growing movement of children's savings accounts.
Why did you decide to study law?
People told me for years that I should be an attorney. As a young person, I was frustrated by the fact that adults saw me as a consumer of information and the only expectation was that I comply with their decisions. In foster care I attended a number of court hearings where I did not speak at all. The first time I spoke in a courtroom I raised my hand and asked whether I had the right.
Young people have great ideas that deserve a forum where they can be heard. I became an attorney to ensure the existence and integrity of those forums.
Have you chosen a certain field of practice? If so, what motivated the decision?
Yes. The outpouring of support and encouragement at the ALC was amazing. Having people express a desire to contribute to my next endeavor was eye opening. I had been dreaming about expanding my part-time consulting work into a full time business. I left the ALC with a sense of commitment to do just that.
I have continued to help businesses and young people engage one another around legal and policy issues. I have had great success building partnerships that bridge legal or policy reform with a youth driven return on investment.
These positive results have motivated me to start my own consulting business.
Have you continued to save through law school? Is there something in particular that you’re saving for?
I learned in the SEED program that consistency is the key to saving so I am pinching pennies to save for start-up costs.
What savings advice do you have for students struggling with the rising cost of education?
I would suggest to work part-time whenever possible. In addition to having an income, you can command a higher salary after graduation based upon on your experience. Also, I started at a community college. I chose to pay lower tuition for general education credits outside of my field of interest. Finally, in my last year of undergrad, a friend and I decided to switch off on preparing meals. Every other day we each prepared a meal for the both of us. It saved me so much time and money I regretted that we had not thought of it sooner.
What are your post-graduation plans? What’re you looking forward to?
I look forward to the simple pleasures that get consumed by law school. I am most looking forward to reading for fun again. I miss lazy afternoons lost in second hand bookstores. I am also looking into small business counseling.
Now that you’re starting your own family, what savings practices do you hope to continue or start with your partner?
Anthony is amazing. He understands how hard I have had to work to get where I am now and he wants to maintain our financial health. One savings practice we hope to continue is avoiding debt.
We set a goal to pay off 100% of our debt, other than my law school loans, before our wedding date and also to not accrue any debt before then either. That meant we would have to pay for the wedding and honeymoon in cash while tackling any outstanding debt.
It was not easy but we stuck to our goal. I am very proud of our resolve because the wedding is three weeks away and we did it!
Everyone told me it was important to use credit cards to build my credit. I see the logic in that advice but the reality is that credit cards are not cost free. I use a credit card only when I have a genuine emergency.
Do you have any advice for policymakers about how they can better craft policies to help close the education gap for low-income students?
In my experience, young people are more likely to be engaged in early education if they can see a connection to their long-term goals. Creating a culture of college expectation early on could motivate young people to stay in school.
The SEED initiative worked because I was able to manage real money that I could earn or loose the opportunity to earn based on my own efforts. That lesson could not have been taught in a classroom alone. It is important to remove financial barriers but also to have young people participate in the process. The effort alone strengthens your resolve to see it through. Every dollar is another affirmation of your goal.
The Power of Savings to Transform Educational Outcomes
By Alicia Atkinson on 07/15/2013 @ 05:30 PM
Today, the New America Foundation hosted an event to discuss the power that savings can have on college enrollment and completion, particularly for low-income students. The event marked the release of a new report by the Assets and Education Initiative (AEDI) of the University of Kansas, Building Expectations, Delivering Results, which reviews decades of research on the benefits of Child Savings Accounts (CSAs), accounts that allow families to save for college as investment gains accumulate tax-free.
The presenters and panelists highlighted key findings and discussed issues regarding CSAs effectiveness in assisting in college enrollment and completion. Here are six key takeaways:
- Student debt curbs college success. Research shows that debt over $10,000 begins to reduce graduation rates for the vast majority of college students, as well as harm long-term post-college financial health. Currently, the average student holds $26,000 worth of debt.
- Low-income students need institutions to assist them in reaching higher education. CSAs create an institution that, early in a child’s life, validates his or her goal of college attendance and completion. One panelist shared a story of a CSA holder who had only $50 in his account but the account had created an overall expectation for him to attend college in the future.
- Successful CSAs have four key features. CSAs should automatically enroll every child at birth, involve initial contributions to seed account, match contributions to accelerate accumulation and allow for withdrawals for pre- and post-college expenses.
- Even small amounts of savings help students enroll in and complete college. Low- and moderate-income students that have savings of less than $500 designated for college were three times more likely to enroll in college and four times more likely to graduate than their peers.
- Early commitment of public funds could maximize money being spent. Rather than issuing awards at the time for college enrollment, an earlier commitment of money could create an expectation of college but still remain within the fiscal footprint of current education programs.
- CSAs encourage financial inclusion for a vulnerable population. Issuing a savings account at birth allows low- and moderate-income families to interact with mainstream financial institutions early and possibly create more savings behavior as they have access to non-predatory financial services.
The event covered a wealth of information and powerful evidence of the effectiveness of CSAs in creating an expectation for students to attend college, enrolling and completing higher education and beginning to create an equitable foundation for the nation’s financial aid system. Click here to read the full report and make sure to browse some of their great infographics.
Top Five Reasons Why a College Degree Still Matters
By Blanche Brown on 07/10/2013 @ 03:00 PM
EDITOR'S NOTE: This post originally appeared on the 1:1 Fund's blog and can be read here.
In the recent years following the recession, the value of a college education has been in question. Many articles, like this one in New York magazine, suggest that a college degree is thought to be more of a financial burden than an opportunity for financial growth. Speculation has circulated about the ability of fresh college graduates to find employment. As a college student, I sympathize with these concerns and sometimes worry that after graduation I will be forced to move back in with my parents and work a menial job despite my degree.
Recent studies, however, prove that the skepticism is unfounded. A college degree is still a big part of a successful future and indicative of financial stability. Here are the top five reasons why a college degree still matters:
- College grads still earn more. In 2003, the average full-time, year-round worker in the United States with a four-year college degree earned $49,900blog3 Blanche, 62 percent more than the $30,800 earned by the average full-time, year-round worker with only a high school diploma. Check out more from the College Board’s Education Pays findings.
- College grads' wages are more stable. During the recession, people with four-year college degrees saw a 5 percent drop in wages, compared with a 12 percent decrease for their peers with associate’s degrees, and a 10 percent decline for high school graduates. Check out the Pew Research Center and this New York Times article for more.
- The more you learn, the more you earn. A report from the State Higher Education Executive Officers shows that each additional level of higher education results in additional economic benefits. Read more at the Ticker and the full report.
- College debt is not as high as the headlines might suggest. We hear lots of horror stories about students graduating after borrowing $100,000 dollars to fund their undergraduate education. Actually, less than one percent borrow that much. The actual average debt accumulation among those who do borrow is about $27,000. For more misconceptions, check out this Chicago Tribune article.
- College grads even show non-financial benefits. Still not convinced a college degree is worth the costs? In addition to having an edge in the job market, a college education has been associated with health benefits. Adults with a college education are more likely to maintain a healthier diet, exercise, and have low cholesterol. Read more about the lifestyle effects of a college degree.
15 Innovations for Municipal Leaders
By Sean Luechtefeld on 07/05/2013 @ 01:00 PM
Last month, NYU’s Wagner Graduate School of Public Service released Innovation and the City, an in-depth exploration of 15 municipal-level innovations to help city residents live better. From London to San Francisco and places in between, cities everywhere are doing great work to improve the lives of their citizens. The innovations documented by NYUWagner include:
- Boston & Chicago’s Updating 311
- San Francisco’s Kindergarten to College (K2C)
- Chicago’s Innovation Loan Fund
- Denver’s Peak Academy
- London’s Project Oracle
- London’s Spacehive
- San Francisco’s Zero Waste
- Philadelphia, Providence & Chicago’s Digital Badging
- Chicago’s Budget Savings Commission
- Seattle & San Francisco’s Open Data
- Oakland’s City ID Prepaid Mastercard
- Seattle & Santa Cruz’s Accessory Dwelling Units and Basement Conversions
- Michigan’s Prize-Linked Savings (PLS)*
- Los Angeles & Chicago’s Immigrant Export Initiative
- San Francisco’s Commuter Tax Benefit
Two of these innovations—numbers 2 and 13 above—identify asset-building innovations that have the potential to serve millions of low- and moderate-income families. San Francisco’s K2C program, for example, is a pioneer of the Children’s Savings Account movement and is working to create a college-going culture among families with children who face rising tuition costs against already-tight family budgets. Further, K2C’s visibility has helped pique interest around other initiatives, such as CFED’s very own 1:1 Fund.
Likewise, Michigan’s PLS initiative is a scalable means of giving families a hand up. Piloted in a number of cities across the country based on the exciting work of the Doorways to Dreams (D2D) Fund, PLS is the next generation of savings strategies. In essence, PLS offers incentives—like raffles and cash—for individuals who open savings accounts and make regular deposits into them. Not only does this increase the amount an individual or family saves, but it also brings un- and underbanked residents into the financial mainstream by connecting them with safe financial products.
These innovations and the other 13 listed above are chronicled in detail in NYUWagner’s report, which you should download here.
Secretary of Education Arne Duncan Visits San Francisco Partner Kindergarten to College
By Michael Chasnow and Blanche Brown on 06/28/2013 @ 10:30 AM
EDITOR'S NOTE: This post originally appeared on the 1:1 Fund's blog and can be read here.
Last week, the City of San Francisco’s Office of Financial Empowerment hosted a conversation with Secretary of Education Arne Duncan about San Francisco’s Kindergarten to College (K2C) effort and the role of children’s savings in supporting the college dreams of all children. As part of the conversation, San Francisco Mayor Edwin M. Lee and Treasurer José Cisneros moderated a roundtable discussion on K2C’s success so far. Since starting three years ago, K2C has opened more than 8,600 college saving accounts, with savers having now accumulated more than $950,000 in college savings.
Other notable panelists included California’s Lt. Governor Gavin Newsom, CFED’s & 1:1 Fund’s Bob Friedman, Citi’s Bob Annibale and school district superintendent Richard Carranza. For media coverage of the event, here’s a story by the San Francisco Chronicle.
Parents and School Leaders Talk College Savings
One of the highlights from the event was an opportunity for several parents and school leaders to share their personal stories about the importance of the K2C program. They brought a real-life perspective to the event that underscored the impact of the program. Dennis Chew, principal of Gordon Lau Elementary, and Michael Lan, a parent of a K2C saver, contributed their thoughts:
Principal Chew: “If the journey of a thousand miles begins with a single step, K2C helps kids take first step [on their college journey].”
Michael Lan (Parent): “Between my wife and me, [we] always intended for our kids to go to college. The issue was [on the] back-burner; now it is front and center. Because we’re talking about college, our daughter is hearing this early. And it’s not just my child – every kid has an account. It sends a message to this generation that we need to do this together. For our children to be in an environment in which they hear the underlying message [about college] is the most powerful thing of all.”
Exciting Campaign for Kindergarten to College
The 1:1 Fund was very happy to attend the event as a partner, and we have been busy all year raising dollars to match the savings of Kindergarten to College savers. Providing a savings match creates a great savings incentive for account holders, especially those coming from a low-income background. In an effort to honor Arne Duncan’s visit and to prepare for this fall’s incoming kindergarten class, the 1:1 Fund has initiated a Fundly campaign.
Every $100 matches an active student saver – please check it out and consider donating. We want to make sure that every incoming kindergartener can have their savings matched, dollar for dollar!
Meet Jamira: A Low-Income Student Turned National Children’s Savings Advocate
By Veronica Weis on 06/11/2013 @ 04:00 PM
Jamira Burley is the Executive Director for the City of Philadelphia Youth Commission and an outspoken advocate of the power of college savings for low-income youth. She recently spoke at a CFED & Opportunity Nation Forum on College Savings in Washington, DC.
Q: Did you grow up thinking that college was a possibility?
As the first of 16 children to graduate from high school and attend college, for a long time, I didn’t think it was even an option. Neither of my parents had graduated from high school, let alone college, and it always just seemed so far out of reach.
Q: How were you able to afford the costs of a college education?
The summer before my senior year of college I decided that I was going to college. So, I applied to every scholarship that I could find and I also was lucky enough to have a full-time job which helped me pay for college and college-related expenses.
Q: What would be the best way to help kids and their parents think about and plan for college?
I think the earlier parents and children start to think about college and preparing is best because it would give them an opportunity to learn and research all of the available options.
From speaking with many of my peers whose families had put aside money for their education, I learned that it didn’t start with a lot of money and parents just saved what they could. So, I think parents and students have to learn and understand their financial options in paying for school but also start saving early, even if it’s a dollar here and there.
Q: What advice would you give to students who might become discouraged and think college might be financially out of reach?
As a person who has worked in education both secondary and post-secondary, I would say that there are way too many options out there, if you look for them. There are a number of scholarships that go unclaimed every year because students don’t apply. I know a lot of people think that it’s all about your GPA but that’s not true. There are a number, hundreds of scholarships, that select awardees on other things besides GPA.
Q: What do you hope to do with your education in the future?
I hope to use my education to enhance the work that I do with youth. My goal is to one day attend law school and help to create policies that will make education more accessible for everyone.
Today is 529 College Savings Day!
By Veronica Weis on 05/29/2013 @ 11:00 AM
Today, May 29, is National 529 College Savings Day, a day to raise awareness about the importance of saving for college with 529 plans. This year, more than 30 states across the country are celebrating 529 day by hosting education sessions, waiving enrollment fees, offering 529 plan scholarships and more. To see an interactive map by The College Savings Plans Network with events nationwide, click here.
To highlight the importance of college savings, we have been sharing student saver stories on the 1:1 Fund's blog this week here. The three-part series features profiles of the participants who spoke with Martha Kanter, Under Secretary of Education, in a Conversation with Savers at the 2012 Assets Learning Conference in Washington, D.C.
Ways to Participate:
A Powerful Moment in the Children's Savings Story
By Michael Chasnow on 05/14/2013 @ 11:00 AM
EDITOR'S NOTE: This post originally appeared on the 1:1 Fund blog, which you can read here.
A couple of weeks ago, WNET’s Need to Know feature on the Mississippi College Savings Account Program, one of two 1:1 Fund pilot sites, aired nationally on PBS. Recently, we spoke with Ernestine Bilbrew, VP of Program Development for the Mississippi Community Financial Access Coalition (MCFAC), to hear how the Need to Know segment impacted her and the MS College Savings Account Program.
How was it having the ‘Need to Know’ film crew in Jackson, MS?
I think it was a really good experience for all of us that are part of the Mississippi College Savings Account Program – MCFAC, our partners, the children, our parents. With the early childhood development centers, the way they got involved and made each of the activities work – visits to the bank, parent workshops, the grocery store a field trip to Jackson State – it was amazing. We were able to capture the whole essence of the program. It highlighted the early childhood development centers and parents, who are central to the program. It was very educational for all of us, but a really positive experience for the centers and parents, as it captured their great participation and they were the key focus of the segment.
What was the most powerful part of the few days of filming for you?
Wow, several parts of those few days really moved me. First of all, when the kids went to the bank. Many of the students stood up on the stool, and would say they wanted to make a deposit. Then, the children would sign their name to show what they were doing, and make the deposit official. For me, this was very telling – these kids had taken ownership of their savings account.
Also, on the tour of Jackson State, the kids had so many questions – they wanted to know everything that was going on at the college, from the different subjects taught in buildings to where students would go to eat.
Then, with the parent session one evening at Jones Early Childhood Development Center, all of it really hit home. I did not realize the type of effect the program was having on parents, who were really proud that they were taking steps to help their children build a better future. That had to be one of the most powerful moments when parents were talking about how much the program had helped and motivated them.
What did you learn from the filming and overall experience?
I did not realize the impact that the program had on parents. Even though it is a children’s savings program, and we were more or less focused on the kids, I did not realize that we were having such a large impact on parents. Hearing parents say they felt very good about helping their kid go to college and reach their dreams, it was very inspiring.
And, it highlighted some of the gaps of our program, specifically around the need to work with parents more. One takeaway for us was the need to really focus on supporting and engaging parents.
Will this film be helpful to the MS CSA Program? If so, how?
It is already having a positive effect – others in our community now want to be involved. Other early childhood development centers, Head Start programs and other partners want to help grow the Mississippi College Savings Account Program, or are using our program as a potential model to replicate. Also, we are going to use the segment as a way of telling our story, and how child savings programs can really energize kids and their parents.
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Opinion: Bipartisan Bill Invests in Next Generation
EDITOR'S NOTE: This story originally appeared on Politico and you can read it here.
Every 5-year-old wants a piggy bank to fill with the jangling pennies and nickels that hold the promise of dreams. But for children from low-income households, even filling a toy bank can be a challenge. That’s why both Democrats and Republicans on Capitol Hill have come together to develop a plan that would help the youngest students learn the benefits of depositing their money in a real bank and saving for a future that includes college.
This week, Sens. Chris Coons (D-Del.) and Marco Rubio (R-Fla.) will reintroduce the American Dream Accounts Act, which would create college savings accounts for low-income students and monitor higher education readiness through a personal online account. The proposal applies existing Department of Education dollars to encourage the development of online platforms that partner students with colleges, schools, nonprofits and businesses, and provide them with a savings account and college readiness tools.
If passed, the Coons-Rubio bill could be an important bipartisan catalyst for new children’s savings efforts nationwide, some of which are already taking shape at the state and local level. Last month, Cuyahoga County, Ohio, approved a measure that will provide all kindergarteners with $100 college savings accounts starting this fall. Similar initiatives are in the planning stages in Colorado and the Puget Sound area of Washington state. These efforts follow in the footsteps of San Francisco’s pioneering Kindergarten to College program, which provides a $50 deposit in a college savings account to every child entering kindergarten. Beyond the initial deposits, these programs seek to encourage families and friends to make regular contributions.
While the deposits may seem like mere pennies given the ballooning costs of a college education, more than a decade of research shows that even small amounts of savings can have a major impact on both college aspirations and attendance. Researchers at Washington University in St. Louis, for example, have found that children with college savings accounts in their own names are six times more likely to go to college than children who do not have an account.
As Cuyahoga County Executive Ed FitzGerald put it at his program’s launch, “Every child in our area will grow up knowing that college is a real and attainable goal.”
The increasing interest in college savings accounts is an acknowledgment of today’s reality: College is indisputably a ticket up the economic ladder, but the soaring cost makes it out of reach for more and more families. According to the Brookings Institution and the Pew Economic Mobility Project, barely one in three children from the poorest fifth of families enrolls in college, and only about one in 10 graduates. By comparison, among the wealthiest fifth of families, four in five children go to college, and more than half (53 percent) graduate.
Children’s savings programs, which have the potential to offer big returns on relatively small investments, are a response with bipartisan appeal. Cuyahoga County’s program, for example, is expected to reach 15,000 students at an estimated cost of $2 million to $3 million a year. Moreover, funding to “seed” and “match” the accounts can come from private and philanthropic sources. The Corporation for Enterprise Development, for instance, recently launched the 1:1 Fund, which raises private dollars for the purpose of matching college savings by lower-income kids through an online platform.
We believe all sectors have a role to play in building strong ladders of opportunity for our children and youth, and that good jobs in our 21st-century economy often require a degree or credential beyond high school. Higher education is one important piece of a comprehensive approach that ensures every young person, regardless of that person’s ZIP code, has a shot at the American dream. With growing state and local interest in college savings accounts, policymakers should seek every chance to encourage their availability nationwide.
They can start by exempting education savings accounts from asset limits that could result in families losing access to much-needed federal benefits programs — a potentially powerful disincentive to save for their children’s future. They can also push for the integration of college savings accounts into existing programs, such as Head Start, and include a financial education component that helps both children and their parents understand the importance of saving for the future.
Finally, they should encourage innovative efforts like the Coons-Rubio legislation. In introducing the original bill last year, Coons posed a simple question: “How can we get more Americans to think about, save for and prepare for education after high school so that they can go to trade school, community college or four-year colleges or universities?” One answer: Give children their own savings account — and then help them fill it with hard cash and hope for the future through personal efforts and policy support.
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Why I’m Proud to Lead the 1:1 Fund – A Tale of Two Grandfathers
By Carl Rist on 04/30/2013 @ 02:00 PM
Like many children who grow up in a middle-class household with university-educated parents, I had the notion of going to college drummed into me at an early age. In raising two sons, my wife and I did much the same – making college an important aspiration and setting aside savings to make it a reality. Yet, as much as going to college is a key part of the American Dream, it’s certainly not inevitable or easy. And as anyone who has kids in college knows, it’s a major investment in the future.
What strikes me more as I get older is that, in a nation of immigrants and people seeking to climb the ladder of opportunity, most of us have a story from the present or not too distant past about that person (or scholarship, or philanthropist) who made college a reality for someone important in their lives. For me, it’s the story of two grandfathers growing up in different parts of the world, but whose stories have an uncanny similarity.
My maternal grandfather, Curtis Byrd, grew up in Live Oak, Florida. Raised by a single mom who had to take in boarders to make ends meet, Curtis would have had no chance at attending college had it not been for a local businessman who took an interest in the young man. In a letter dated April 24, 1924, Mr. Hillman, then the vice president of First National Bank in Live Oak writes, “If you need more money to finish your term of school, you may draw on me for the amount.”
At the same time halfway around the world, Albert Rist, my paternal grandfather, was the youngest child in a large peasant farming family in southern Germany. In Albert’s case, it was the local parish priest who took an interest in him and offered to pay, first, the costs of attending the Gymnasium (a German academic high school) in a nearby village and then later college in Tübingen. During college, when my grandfather confessed to the priest that he was really more interested in math than theology, the priest urged him to finish anyway and continued to cover his costs.
Both of these men became the first in their families to graduate from college, and for both, post-secondary education changed the trajectories of their lives and the lives of their descendants. Who is the one person that made college possible in your family? And whom will you help to reach their higher education dreams?
Today is Teach Children to Save Day
By Veronica Weis on 04/23/2013 @ 10:00 AM
Today is Teach Children to Save Day, a national program of the American Bankers Association that organizes banker volunteers to help young people develop a savings habit early in life. Since the program started in 1997, some 123,000 bankers have taught savings skills to more than 5 millions students. This year, over 10,000 bankers in 49 states are taking part in this nationwide effort to improve financial literacy.
As part of our commitment to improve financial literacy and teach kids how to save for their economic futures, we launched the 1:1 Fund, a social enterprise and online community that promotes educational opportunity for low-income students. Leveraging the power of social media, the 1:1 Fund connects low-income students with individual donors who match the savings of these students in qualified child savings accounts (CSAs).
Just in time for Teach Children to Save Day, Need to Know on PBS correspondent Stacey Tisdale traveled to Mississippi to examine the Mississippi College Savings Account Program (MS CSA) designed to help low-income, mostly African-American children save for college – and teach them about banking and money along the way. You can learn more about the MS College Savings Account Program on the 1:1 Fund's website and by watching the video below.
We'll be tweeting today using #TCTS2013 and if you're interested in participating in this important conversation, we've included ways to get involved below.
Ways to Engage:
- Start by watching the video and share Friday’s episode of Need to Know on Twitter by clicking here.
- Want to help the College Savings Accounts of the Mississippi kids grow? Provide matching donations through the 1:1 Fund.
- Follow the @ababankingnews Twitter account and use the hashtags #TCTS2013 and #FinLitMonth in any Teach Children to Save Day or financial education-related posts by adding them at the end of each posting.
- Search the hash tags #TCTS2013 and #FinLitMonth to find other opportunities to engage in conversations around financial literacy month and Teach Children to Save Day.
- Finally, use the comments section below to share your thoughts on CSAs. Thanks for keeping the conversation going!
Education is One Way to Narrow the Racial Wealth Gap
By Carl Rist on 03/22/2013 @ 10:00 AM
EDITOR'S NOTE: This post originally appeared on the 1:1 Fund's blog and can be read here.
For generations of Americans, graduating from college has been the surest route to achieving the American Dream. Indeed, in his acceptance speech at the Democratic National Convention last September in Charlotte, North Carolina, President Obama noted, “Education was the gateway to opportunity for me.” Yet, the price tag for attending college continues to rise. With tuition and fees for resident students at public four-year colleges and universities rising at an annual rate of 5.6% (from 2001-2011), one has to wonder what this financial barrier means for the future of economic and social opportunity in the United States.
A new report from Brandeis University’s Institute on Assets and Social Policy sheds some light on this question, and the emerging answer is a growing wealth gap, especially along racial lines, resulting from unequal education opportunity. In their report, The Roots of the Widening Racial Wealth Gap: Explaining the Black-White Economic Divide, the Brandeis researchers find a growing wealth gap between white and African-American families. The main driver of this wealth gap is homeownership, but the Brandeis researchers also identify educational inequality as another key factor, and a major cause of this is paying for college. For example, financial considerations such as rising college costs, the need to work while in school rather than attend full-time, and the concern about taking on high levels of debt result in more African-American students (compared to whites) dropping out of college without a degree. Ultimately, the Brandeis researchers estimate that educational inequality is the fourth most important driver of the racial wealth gap, behind only homeownership, household income and unemployment.
So what’s the solution? Certainly, controlling college costs and ensuring that need-based aid keeps up with inflation are strategies that we, as a nation, must pursue. But there are also things that students, families and communities can do. Since we know that students with a savings account are much more likely to attend and finish college, we need to encourage all families to start saving money early for their children’s higher education. That strategy will have a positive impact on individual families’ financial health, their children’s job prospects and economic opportunities, and the overall health and prosperity of our country. As a nation, though, we’re not great savers, and for students from low-income families, who often are students of color and who will be affected most by the financial hardships of college, the challenge is even greater.
Here at the 1:1 Fund, we believe in the importance of saving for college and want to bring this opportunity to all children, especially students of color and those from lower-income backgrounds. In San Francisco, our partners at Kindergarten to College (K2C) work with every kindergartner in the San Francisco Unified School District, whose students are 41% Asian American, 23% Latino, 11% white, 10% African American, 1% Native American, and 14% other or declined to state. Of all SFUSD students, 26.5% speak English as a second language. In Mississippi, 100% of our student savers are African American and low-income. While the rising cost of college and the limits of need-based aid must be solved at the federal and state levels, individual families and their communities can help offset the financial burden of higher education by saving early and often – the 1:1 Fund exists to help them do just that. Please consider donating to the cause, and matching students’ savings, at www.1to1fund.org.
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