CSAs and College Scholarships: The Beginning of a Beautiful Friendship
By Carl Rist on 10/27/2016 @ 01:00 PM
As Sara Goldrick-Rab describes in her new book, Paying the Price: College Costs, Financial Aid, and the Betrayal of the American Dream, the inability to afford college is a significant reason for low rates of college completion for students from low-income families. In fact, less than 10% of students from low-income households complete college by their mid-20s. Given this strong connection between financial resources and college completion, I was excited to attend the annual conference of the National Scholarship Providers Association (NSPA) earlier this month. NSPA’s 370+ member organizations from the United States, Canada and the Bahamas give over 350,000 scholarships amounting to over a billion dollars each year, helping thousands of students – many of them low-income – pay for college and achieve college success.
As someone with both feet planted firmly in the Children’s Savings Account (CSA) world, it was especially rewarding to see and learn at the NSPA conference about a growing interest on the part of scholarship providers in understanding and integrating college savings into their existing work to help students meet the financial demands of going to college. Dr. William Elliott, Director of the Center on Assets, Education and Inclusion (AEDI), and I were at the conference to talk, in particular, about the potential for collaboration between CSA programs and College Promise Campaigns or Promise Programs (which typically extend a “promise” to elementary or secondary students in a particular community of either scholarships or free tuition to cover all or part of postsecondary tuition costs).
We were already aware of a couple of early-stage innovators in the world of higher education access who had previously begun to integrate matched college saving accounts and college scholarship models. This includes the Scholarship Foundation of St. Louis, which provided almost $5 million in no-interest loans and direct grants to students last year and also opened Missouri 529 accounts with a $500 initial deposit and an offer of additional savings matches to two cohorts of 8th graders at a St. Louis middle school. Another innovator is Earn to Learn, a model effort in Arizona that uses institutional aid from three higher education institutions in Arizona and federal Assets for Independence (AFI) funds to match the savings of low-income high school and college students. Over 1,000 Earn to Learn participants have taken advantage of the program’s generous 8:1 match and have saved over $700,000, which in turn has helped these students earn over $5.6 million in matched savings scholarships.
While at the NSPA conference, we learned about two more promising efforts that combine CSAs with scholarships:
- Forman Scholars. The Forman S. Acton Educational Foundation, launched in fall 2014, promotes educational opportunities for youth in Salem City, NJ. The Forman Scholars, who must attend Salem City High School and meet specific academic and financial need requirements, can receive between $10,000 and $40,000 in scholarships over their college careers. In addition, through a new initiative known as the Acorn Fund, the Acton Foundation will invest in college savings accounts for every child in Salem.
- KC Scholars. The Ewing Marion Kauffman Foundation recently announced the new KC Scholars program, which is designed to increase postsecondary educational attainment in the greater Kansas City area. As part of KC Scholars, 250 scholarship awards will be made annually to students in the 11th grade, with a commitment of up to $10,000 per year, renewable for up to five years. In addition, 1,000 9th graders will be chosen annually to participate in a college savings effort that will provide a $25 initial deposit in a 529 College Savings Plan. In each class of savers, fifty students will be selected to receive a 4:1 savings match (up to $5,000) with an additional $2,000 in potential incentives for students who achieve college-readiness milestones.
All of these models demonstrate the unique power and potential of combining CSAs and college scholarship programs. As we concluded in the paper on CSAs and College Promise programs that CFED co-authored with Dr. Elliott, CSA savers need a “promise” or scholarship in addition to the modest savings CSAs provide to help cover the cost of college attendance. At the same time, College Promise and other scholarship programs need CSAs to fully engage the aspirations of all students, not just those that already expect to go to college.
Research Highlights from CSA Programs in Indiana and New Mexico
By William Elliott III, Guest Contributor on 09/19/2016 @ 01:00 PM
As part of a national Children’s Savings Account (CSA) research strategy—the Center on Assets, Education, and Inclusion (AEDI) is conducting analyses of four programs in select regions of the county: Promise Indiana, New Mexico’s Prosperity Kids, San Francisco’s K2C, and Maine’s Harold Alfond College Challenge. In this blog I will discuss findings on savings from the Promise Indiana and New Mexico programs. Findings underscore what should now be a settled question: low-income Americans can, will, and do save for their children’s educations.
Highlights from the Promise Indiana paper include:
- CSAs can increase ownership of 529 accounts. In this sample, exposure to Promise Indiana intervention is associated with an increase in the odds of reporting owning a 529 account by more than 3.75 times.
- Even with Promise Indiana’s robust community engagement approaches, the percentage of eligible kindergarten children opening accounts through Promise Indiana declined from 63% in 2013 to 28% in 2015. This suggests that only universal CSAs that automatically open accounts will be able to deliver these critical investments to all children.
- Forty-four percent of families who opened an account through Promise Indiana have made deposits. Many families are saving steadily. Average quarterly savings are $25; the median is $5 per quarter.
- With an average tenure of 24 months, Promise Indiana CollegeChoice 529 accounts have an average balance of $134. Considering only savers, the average is $274.
Prosperity Kids’ CSA design includes some distinct features, allowing a range of purposes, providing emergency savings accounts for parents, requiring parents to participate in extensive financial capability training, and using transfers to incentivize parental engagement in children’s development. Most accountholders are Latino, many of them immigrants, and they are substantially economically-disadvantaged. More than 80% of children are eligible for free-and reduced-lunch, and 68% of parents interviewed have household incomes less than $25,000 per year. In Prosperity Kids, our research found:
- 29% of accounts have seen deposits from families’ saving.
- Among savers, median total account value was $345 at the end of 2015. The median amount of family deposits is $123. Average monthly contributions are $12 (ranging from <$1 to $220); average quarterly contributions are $31.
- Parent interviews reveal college-saver identity development. Participation in Prosperity Kids seems to be making college saving a salient financial objective, something worth striving for, starting today, and the support of the program may help to make saving seem like a manageable, albeit still difficult, objective. Prosperity Kids’ structure may be responsible for particularly strong evidence of group congruence. Parents recruit each other and are encouraged to hold each other accountable for adhering to savings goals in an explicit attempt to foster a shared commitment to saving.
- Parents describe saving primarily by reducing consumption, drawing on lessons from the financial education provided by Prosperity Kids. As mom Daniela, who earns less than $25,000 per year, describes: “Well now I make a shopping list. I didn't before. I used to bring money in the purse, and I'd just spend it in things that I didn't really need in the house you understand?...And whatever is left over instead of spending it I go to deposit it… And now there's no fries, no juices, more savings.”
Just as surely as the fact that low-income families can, will, and do save, we can be equally sure they only save relatively small amounts when compared to more affluent families. It is important to note, however, that although these amounts may be relatively small when compared to more affluent families, it does not mean they don’t represent extraordinary efforts on part of low-income families. Moreover, there is strong evidence that CSAs can exert powerful effects with little to no savings activity. SEED for Oklahoma Kids’ rigorous analysis has revealed that CSAs can cultivate gains in children’s social/emotional well-being and parental educational expectations even when accounts are automatically opened and seeded and parents take no action. In short, when it comes to CSAs and their potential to chart more equitable futures, it may not be the amount of savings that matters most.
This does not mean that savings behavior is irrelevant. CSAs serve to facilitate financial inclusion as well as educational attainment. It may also be that CSAs’ effects on children’s well-being, some of which are understood to be fostered through the creation of college-saver identities, may be enhanced through regular interaction with the account. The act of depositing may keep college front of mind, and growing balances may make the task of college saving seem less daunting.
Dr. William Elliott III is an associate professor at the University of Kansas (KU) and founder of the Center on Assets, Education, and Inclusion (AEDI) in KU’s School of Social Welfare.
Action Alert: Tell the Senate Not to Cut Assets for Independence!
By Ezra Levin on 06/14/2016 @ 12:00 PM
IDAs are on the chopping block. Take action now to preserve this critical program!
The Senate Appropriations Committee just moved to zero out funding for the Assets for Independence (AFI) program, which has funded and supported Individual Development Account (IDA) programs nationwide for nearly two decades. Several other programs were also eliminated in the committee’s $160 billion funding bill for education, health and human services and labor programs. The committee vote was nearly unanimous, meaning the bill has wide bipartisan support.
This is a significant development because the committee has never moved to eliminate AFI before. While there are several steps between the committee’s action and the bill becoming law, we need your help to let the Senate know how important AFI is, and to oppose any action that eliminates the program. Please email or call your Senators to make this clear; see instructions below for making your voice heard. Once you have contacted your Senators, please let us know by emailing Ezra Levin, as we will be monitoring developments closely and working to build opposition to this misguided action. When and if the Senate schedules a vote later this year on the bill, we will be reaching out to you again to quickly mobilize opposition to any cuts to AFI.
Call your Senators and urge them to protect the Assets for Independence program!
- Call 202.224.3121 and ask to be connected to your Senator’s office. If you don't know who your Senators are, find out here.
- Once you're connected, here's what to say:
My name is [your name] from [your organization or coalition], and I’m calling to request that Senator [Senator’s last name] oppose the Fiscal Year 2017 Labor-HHS-Education Appropriations bill (S.3040) because it would eliminate all funding for the Assets for Independence program. Assets for Independence supports innovations in the field and helps low-income workers save their own money and build assets to become self-sufficient. [Add local AFI program details here if applicable]. Since Assets for Independence was enacted nearly 20 years ago, the Senate has never moved to eliminate its funding. Unless funding for Assets for Independence is reinstated, I strongly urge Senator [Senator’s last name] to vote against the appropriations bill when it comes to the Senate floor for a vote. Please let the Senator and the appropriations staffer know that I will be watching this closely and will get in touch again after the vote.
Thank you for everything that you do on behalf of low- and moderate-income Americans everywhere. If you have any questions or need any additional information, please let us know.
"Having the College Savings Account Gives Us Dreamers a Look Into the Future"
By Kaitlin Archambault, Guest Contributor on 04/28/2016 @ 04:00 PM
Editor’s Note: April is National Financial Capability Month, and the “I Have a Dream” Foundation (IHDF) is teaming up with the 1:1 Fund to profile three of IHDF’s Children’s Savings Account (CSA) programs. Today’s blog post is the final installment in a three-part series about how each of these programs uses the college savings account program to support their students' college goals. You can read the first installment here and the second here.
This week, we spoke with Daniel Sikkink Johnson, Director of College and Career Programs at “I Have a Dream” Foundation of Boulder County, CO. Johnson says that the ultimate goal for Boulder’s CSA program is for every single Dreamer to have an account as soon as they enter the program in second grade. The program currently has over 165 students grades 5-12 enrolled in CSAs. They currently have 250 students in elementary school for whom they hope to open accounts and are working to incorporate CSAs into the enrollment paperwork for the “I Have a Dream” program.
The Boulder CSA program is far-reaching: they are working to incorporate milestones at least through the first year of postsecondary education and are developing ways to use CSAs to engage with alumni — and in turn, engage alumni with current Dreamers. We look forward to seeing how CSA milestones can help alumni give back by attending fundraisers or volunteering with younger Dreamers.
Aside from rewarding things like attendance and good grades, Boulder’s CSA milestones include targeted steps on the path to college. Ninth- and tenth-grade dreamers earn funds for their CSAs by writing resumes and attending a “college boot camp” over spring break, while eleventh-grade Dreamers also earn a deposit for taking the ACT test. Twelfth-grade milestones closely follow the college admissions process, with incentives for letters of recommendation, personal statements and financial aid and scholarship applications.
CSAs not only help prepare Dreamers for college, they also teach young people about saving. "I think having the college savings account gives us Dreamers a look into the future and to think about how to plan out our money and save money responsibly,” said Andrea, a senior in Boulder who would like to attend University of Colorado Denver. “I wasn't raised around saving money because we live from almost always paycheck-to-paycheck, so having a college savings account will help me save money and it is a great resource to have.” The connection between saving and a college-going mindset is also clear; as Andrea says, “Money was put into my account because of me wanting to go to college. I find that awesome.”
Leslie, another twelfth-grade Dreamer, finds the CSA milestones motivating: “Having a college savings account motivates me to attend more college visits and other college related-events because I know that I will be adding more money to my account. I already know I am going to college, but it reassures me that there is money to help me out.”
We look forward to watching the Boulder CSA program grow!
This Innovative Matched Savings Model Makes More Students Stay in College
By Stephanie Landry and Amy Shir, Guest Contributor on 04/21/2016 @ 01:00 PM
Assets for Independence (AFI), a federal program administered by the Administration for Children and Families at the US Dept. of Health and Human Services, enables low-income participants to save towards their dream of owning a home, starting a business or attending college. They do this through Individual Development Accounts (IDAs), in which participants save for one of these three assets and ultimately have their savings matched at the point of purchase through a combination of federal grant and non-federal matching funds. While this “dream program” has improved the financial lives of thousands of participants, those who’ve administered AFI projects recognize that there are often challenges to grant implementation, including raising the required non-federal funds to match the AFI grant, finding participants that are able and ready to save and creating a sustainable program.
Luckily, thanks to several fantastic AFI grantees, including Earn to Learn in Arizona, an innovative model has emerged for using IDAs to help students pay for and complete college. This model works by using the college’s scholarship funds to match federal grant dollars; these funds, combined, go to match student savings at a rate of eight to one (resulting in up to $4,000 matched for $500 saved). This approach has been met with astounding success: Earn to Learn alone has enrolled roughly 1,000 student-savers and, most impressively, these students are persisting at rates of over 90%. Additionally, this approach will decrease debt burdens faced by students through narrowing the gap in unmet student need; if a student participates in this model during four years of school, they will have received $16,000 in funds to match their $2,000 of savings.
This model addresses three of the major common challenges faced by AFI grantees:
- The critical non-federal match requirement can come in the form of already-present scholarship or other financial aid dollars earmarked for low-income students. Colleges love this approach, because they are effectively able to nearly double scholarship dollars when combined with an AFI grant. All of these funds end up being paid to the college through tuition and/or fees.
- Higher education institutions, both two-year and four-year, have large pools of low-income students that have earned income, such as through work study, and are well-positioned to save. This can help AFI grantees that are struggling to find savers that are ready to participate in an IDA. These grantees should consider partnering with the financial aid offices at their local community colleges and universities.
- With a pool of savings-ready students, AFI grantees working with colleges can develop sustainable programs. For example, Earn to Learn, applies for a new grant with each partner college every year, the highest frequency allowed by AFI. They are then able to serve the same students through different grants during each year of their students’ attendance. This volume of grants allows them to receive additional administrative funds to support their IDA program delivery.
Stay tuned to learn more about these promising solutions. CFED is developing a case study of Earn to Learn’s AFI project model that will detail how the program was set up, operates and takes advantage of the efficiencies and scale of this sustainable, innovative model.
Amy Shir is an asset-building consultant.
New Bipartisan Bill Boosts Financial Security at Tax Time
By Ezra Levin on 04/13/2016 @ 04:00 PM
Millions of Americans are poised to get a big opportunity to move their financial lives forward if Congress acts on a bold new policy proposal. We are excited to share the news that Senators Cory Booker (D-NJ) and Jerry Moran (R-KS) have introduced the Refund to Rainy Day Savings Act today!
This bipartisan bill, built on years of research and lessons from the asset-building field, will empower Americans to use the tax-time moment to save for emergencies and foster innovation within the Assets for Independence (AFI) program, the nation’s largest asset-building initiative. Specifically, the bill will:
- Allow tax filers to set aside a portion of their refund as emergency savings for later in the year. Tax filers receiving a direct deposit tax refund may defer 20% of their refund by opting into the Rainy Day Savings Program on their 1040 tax form. This savings will accumulate interest before being transferred to the tax filer’s account six months after deferral. Tax filers may also opt to withdrawal their funds early, any time after thirty days from filing.
- Establish a pilot program to evaluate savings matches for lower-income tax filers. This pilot will explore the impact of using matching funds to incentivize the establishment of emergency savings at tax time through the deferral. In this pilot, lower-income tax filers will be able to receive a match ion their 20% deferral at the end of the six-month period. Community organizations, such as those operating VITA sites, will apply for grants to administer this match to their participants and help them build savings and financial capability skills.
- Amend the Assets for Independence grant program. The bill will greatly expand the flexibility of the program by:
The introduction of this bill is a huge step forward for financially vulnerable Americans. Its passage would create a new tool — the Rainy Day Savings Program — to help low-income tax filers save for the inevitable financial emergencies that can occur at any time. With this new savings tool, participants will be less likely to need to reach for a credit card or payday loan when a surprise medical bill or car repair busts the monthly budget. Additionally, the amendments to the AFI program reflect the lessons learned from two decades of Individual Development Account (IDA) implementation and the understanding that practitioners and participants need greater flexibility to maximize the wealth creation potential of the program. Both of these features, with the help of practitioners, will allow Americans to move towards financial security. We urge Congress to take swift action on this legislation to give Americans the opportunity to build a more financially secure future for themselves and their families.
CFED is proud to have worked closely with Senators Booker and Moran on this legislation. This was a very collaborative effort, and we were very pleased to see a large group of leaders weigh in with their own expertise and endorse the final bill. This group includes:
- Aspen Institute Financial Security Program
- Asset Building Program, New America
- Center on Budget and Policy Priorities
- Center for Global Policy Solutions
- First Focus Campaign for Children
- The Housing and Community Development Network of NJ
- New Jersey Policy Perspective
- Young Invincibles
Starting a Children’s Savings Program? 6 Things to Know about Selecting an Account
By Monica Copeland on 03/14/2016 @ 05:00 PM
Selecting an account to use for participant savings is one of the most important components of designing a Children’s Savings Account (CSA) program. It’s also the area where we get the most questions from program designers. CFED recently presented a webinar on this topic to help practitioners new to CSAs think through what to look for when choosing an account. (We also wrote extensively about account options in the CSA design guide, Investing in Dreams: A Blueprint for Designing Children’s Savings Account Programs.) Here are some of the questions we received during the webinar and other commonly asked questions about accounts.
1. What type of accounts do most CSA programs use?
Current CSA programs generally use five main types of accounts to hold children’s savings. Some CSA programs use savings accounts at a bank or credit union, such as pooled savings (with custodian) and individual custodial savings accounts. Other CSA programs use 529 accounts, including omnibus, entity-owned and parent/guardian-owned accounts. Each of these account types are explained in greater detail in Investing in Dreams.
2. Which of these accounts is best for a program to use?
Savings accounts and 529 accounts both have pros and cons, and the decision ultimately depends on the priorities of the program. Programs should consider the account features that are the most crucial to serving their target population, reaching the desired scale for the program, meeting the program’s goals, and working within funding constraints. The program design blueprint at the end of chapter 5 of Investing in Dreams also provides further guidance.
3. What are ideal account features for participants?
It is important that accounts be accessible for participants, so key features include multiple deposit options (e.g., in-person, online, etc.), convenient financial institution locations and not requiring a social security number to open an account. Also, to help savings grow, accounts will ideally have interest-bearing or investment growth potential and no or low fees. In addition, it is important that account funds do not count toward asset limits for public benefits, so that low-income families are not penalized for saving.
4. What are ideal account features for programs?
Programs should select accounts based on features such as ease of account opening and monitoring. Financial institutions that have the capacity to open large numbers of accounts for minors at a time are preferrable for large scale programs or those enrolling many children at a specific time of year. In addition, program coordinators will want accounts that can differentiate between participant deposits and incentive funds as well as provide access to regular account activity reports. Furthermore, withdrawals should require account custodian approval so that deposits are used for the intended purpose.
5. How can you ensure savings do not affect eligibility for public benefits?
If the accounts are owned by a custodian such as a nonprofit or public entity, the savings in those accounts will not count toward participants’ personal assets. As a result, these types of accounts, such as pooled savings accounts or omnibus 529 accounts, will protect families from losing eligibility for federal or state benefits with asset limits.
6. What types of organizations can be account custodians?
Organizations fulfilling the role of account custodian should be well-known and trusted in the communities in which the CSAs are provided. In addition, chosen organizations should have the sustainability and commitment to hold the accounts until the program participants are ready to use their savings. Local or state governments, nonprofits, educational institutions or foundations are a few of the types of organizations well-suited to be account custodians.
For additional information about choosing an account or financial partner, and for details of other aspects of CSA programs, download Investing in Dreams. CFED will continue to share additional design considerations and showcase successful programs as part of a learning series this spring and summer. The next CSA webinar, “Insights from Community-Based Programs,” will take place on Friday, March 25 (2-3 pm EDT); click here to register. Also join the Children’s Savings Network to stay tuned for more information.
President Clinton Announces Launch of Campaign for Every Kid’s Future
By Andrea Levere on 06/09/2015 @ 02:00 PM
President Clinton joined on stage with CFED President Andrea Levere; Colorado Governor John Hickenlooper; San Francisco Treasurer José Cisneros; St. Louis Treasurer Tishaura Jones; Heidi Goldberg, Director of Economic Opportunity and Financial Empowerment for the National League of Cities Institute for Youth, Education and Families; Laura Owens, Director of Strategic Initiatives for the 'I Have A Dream' Foundation; and Michael Sherraden, Founder and Director of the Center for Social Development at Washington University in St. Louis.
We are thrilled to share the news that just hours ago, President Bill Clinton announced the launch of our newest initiative, the Campaign for Every Kid’s Future, at the CGI America Conference in Denver. This Campaign, led by CFED and nearly two dozen leading public officials, national and community organizations, researchers and others, is designed to connect 1.4 million children to asset-building savings accounts by 2020.
Children’s Savings Accounts (CSAs) are a proven two-generation strategy for helping kids and their families move up the economic ladder. Higher education—the surest route to economic success—is within reach when conversations about college happen at an early age. In fact, evidence shows that children with college savings of just $500 or less are three times more likely to enroll in college and four times more likely to graduate.
Given the power of CSAs, CFED is honored to work with the many partners who are making the Campaign for Every Kid’s Future possible, and we invite you to get involved. By participating in the Campaign, you will be able to connect with potential partners, influence policymakers and access useful resources, including CFED’s soon-to-be-released interactive guide to designing a successful CSA program. Here’s how to get involved:
- For individuals: Sign on to the campaign and get timely updates about the ways that you can help make our collective dream of 1.4 million Children’s Savings Accounts by 2020 a reality.
- For organizations: Become a formal partner and add your organization to the growing list of local, state and national organizations working to increase the number of large-scale children’s savings programs in the United States. Contact Carl Rist to get started.
- For all of us: Make a donation to match the savings of a child aspiring to go to college. You can use the CSA Directory to find a program near you, or donate to the 1:1 Fund, an online fundraising platform that works to match kids’ college dreams, dollar for dollar.
In addition to joining the campaign, you can stay informed and join the conversation about the power of children’s savings by following #savingsforkids on social media and by visiting the Campaign for Every Kid’s Future homepage at savingsforkids.org.
Thank you for all you do to help ensure that all kids get the chance to succeed that they deserve.
The Campaign for Every Kid’s Future would not be possible without the nearly two dozen local, state and federal officials; national and community organizations; researchers and other partners who are dedicated to expanding the reach of children’s savings programs in the United States. To learn more about them, visit savingsforkids.org and follow them on Twitter.
Savings Experiment Showing Promise for Children’s Futures
By Margaret M. Clancy, Guest Contributor on 04/24/2015 @ 10:00 AM
EDITOR'S NOTE: Today is Teach Children to Save Day! To mark the occasion, we've invited Margaret Clancy of the Center for Social Development to write a guest post explaining the power of Children's Savings Accounts. Read below to learn more about CSD's cutting-edge research.
An experiment that models the first truly universal Child Development Account (CDA) policy in the United States is yielding promising results for parents and children.
The experiment, called SEED for Oklahoma Kids (SEED OK), is a large-scale policy test of automatic and progressive accounts for all newborns.
Early published research results from the Center for Social Development (CSD) at Washington University in St. Louis indicate positive effects on asset building, upticks in parents’ attitudes and even improvements in child development. Also, the research is influencing 529 savings policies, particularly at the state level. In fact, three states have made significant changes to savings programs for children:
- Maine instituted a major change in policy and became the first state to provide automatic and universal deposits of $500 for all resident newborns.
- Nevada introduced automatic $50 deposits for all kindergarten students in public schools.
- Rhode Island simplified enrollment for newborns to receive $100 in the state’s 529 college savings plan.
A few words about Child Development Accounts: They are savings or investment accounts for long-term development purposes, such as college education. The accounts include initial deposits, savings matches or benchmark deposits from public and private funds. Ideally, CDAs are universal, progressive and lifelong. Michael Sherraden, Ph.D., the Founding Director of CSD, proposed accounts for all children as long ago as 1991.
“The theory behind SEED OK is that accumulating assets within a household may positively affect the family’s outlook on that child’s future,” says Sherraden, the George Warren Brown Distinguished University Professor. “Now, seven years later, we’re beginning to see this work yielding promising results.”
CSD researchers propose that CDAs increase financial preparation for college, which contributes to college-bound identity—and to college success.
Some findings: A CDA not only gives some disadvantaged parents hope for the future, but it also results in improved social-emotional health for their children. The study, published in JAMA Pediatrics, found positive effects regardless of whether parents deposited the money into an account themselves. This indicates that neither the act of saving nor the amount saved is relevant in this developmental improvement.
Also, after four years, the SEED OK CDA boosted mothers’ mental health and improved mothers’ expectations for their children’s education. Extended interviews with a cross-section of the mothers suggest that the CDA makes them more hopeful about their children’s future and gives them the feeling that someone outside of their family cares.
SEED OK research shows that—without automatic accounts and initial deposits—a very small proportion of young children would have accounts and assets for college, and the vast majority of those with accounts would be socioeconomically advantaged. The universal and progressive approach modeled by the SEED OK CDA, however, gives all children—not just those who are advantaged—the opportunity to benefit.
For the SEED OK experiment, researchers randomly selected children born in Oklahoma in 2007 and randomly assigned them to either a treatment group or a control group after their mothers completed a baseline survey.
Children in the treatment group received the SEED OK CDA, which included an automatically opened Oklahoma College Savings Plan (OK 529) account with a $1,000 deposit. In addition, treatment families received communications encouraging them to open their own OK 529 accounts for their infants and were offered a time-limited $100 account opening incentive. Low- and moderate-income families received matches on their contributions to OK 529 accounts.
Those in the control group did not receive the SEED OK CDA, but they—like non-study participants—had the opportunity to open an OK 529 account.
CSD advises state officials on making their 529 plans inclusive. At the federal level, policymakers have discussed using 529 plans to create a system of universal and progressive accounts for children, and SEED OK research will play an important role in informing federal initiatives.
SEED OK research is expected to continue for a number of years. In the future, researchers will examine whether the SEED OK CDA continues to improve child development, motivates parents and children to prepare for college, and affects high school graduation and college attendance rates.
For more information:
* ”CDA” and “CSA” refer to “Child Development Account” and “Children’s Savings Account,” respectively. Each term refers to the same concept; differences are merely in preference alone.
Margaret M. Clancy is the Policy Director and College Savings Initiative Director at CSD. She is responsible for design and leadership of large-scale policy demonstrations, including the SEED for Oklahoma Kids (SEED OK) research experiment. Since 2001, she has been researching features of 529 college savings plans as a model for inclusive asset-based policy, and she is an expert on progressive 529 policies in the states.
Financial Capability: It’s Not Just for Adults
By Shira Markoff on 04/20/2015 @ 10:00 AM
So far this month, we’ve talked about two important platforms for financial capability— housing and tax time. This week we turn our attention to an important population—children and youth. We focus on children and youth (ages 0-21) because building financial capability early in life can make a significant difference in adulthood. Just as we seek to provide young people with the education they need to be successful, we also need to arm them with the financial skills, knowledge, access and practice they need to grow into financially capable adults.
Growing research supports this idea, demonstrating that the precursors for financial well-being in adulthood—such as executive function and attitudes about finances—are built during childhood and youth. Recognizing the importance of preparing financially savvy citizens, many states have put requirements in place for financial education in schools. While financial education is helpful, building financial capability requires more than just knowledge—it requires practice. For example, the Assessing Financial Capability Outcomes Youth Pilot found that pairing financial education with the opportunity to “practice” with a savings account enhanced students’ knowledge of financial information.
Financial capability strategies can also impact educational outcomes for young people. Research indicates that helping children save for postsecondary education, such as through a Children’s Savings Account program, fosters the creation of a college-bound identity in which they see themselves as someone who will go to college. Another study shows that low- and moderate-income children with college savings of between just $1-499 are three times more likely to enroll in college and four times more likely to graduate.
Financial capability strategies for youth can be implemented through a number of platforms including:
- Head Start: In 2010, Action for Boston Community Development incorporated age-appropriate financial concepts into its Head Start classroom curriculum, while simultaneously offering financial education classes for Head Start parents.
- Elementary and secondary schools: The Kindergarten to College (K2C) program in San Francisco provides every incoming public school kindergartner with a CSA seeded with an initial $50 deposit, along with financial education in the classroom and opportunities to earn savings matches.
- Youth employment programs: The MyPath Savings program provides a range of financial capability services to youth in San Francisco workforce development programs, including peer-to-peer financial education, a savings account tied to an ATM card and incentives for meeting personal financial goals.
- Child welfare system: Through the Opportunity Passport program, Jim Casey Youth Opportunities Initiative sites offer a matched savings program for young people transitioning from foster care to adulthood, which helps them purchase assets such as a car, stable housing or books for college.
These are just a few examples of the many ways that organizations around the country are helping young people build their financial capability. What other examples do you know about? Use the comments to let us know!
The 1:1 Fund's Impact in 2014
By Claire Sorrenson, 1:1 Fund on 04/13/2015 @ 04:00 PM
The 1:1 Fund's recently released impact report celebrates the many successes of 2014. Here are our favorite highlights:
- The 1:1 Fund is attracting more donors. In fact, we attracted more donors than ever – a total of 279 who contributed an impressive $280,000 in 2014. The matching dollars we raised incentivized over 2,000 students to save more than $1.3 million in college savings in 2014 alone.
- The 1:1 Fund is growing. We doubled our network of partners from 4 sites to 8, expanding into 7 states across the country.
- The 1:1 Fund is creating a legacy. Since our launch with just two pilot partner programs in 2012, we've raised $850,000 from 440 donors. Every single one of those dollars matches the college savings of a student, motivating them to save and strive for college.
- The 1:1 Fund is motivating students. Students like Miguel, a second-grader in the Bronx. Miguel rallied friends and family to contribute to his savings account. In just 16 months, he saved nearly $1,200, $600 of which came from match and incentive funds. Miguel's mother said, "Miguel never wants to spend money on needless things. He always wants his money to go to his college savings account."
- The 1:1 Fund is connecting children's savings partners, donors, and student savers. As Chris Avila Hübschmann, founder of 1:1 Fund partner Credit Do, explained, "The 1:1 Fund is like the quarterback for children's savings. They help connect the individuals who are in need of hope."
To read more, browse the interactive impact report below or download the PDF version.
What We Learned from the Savings Innovation Learning Cluster, Part III
By Carla James, Guest Contributor and Dean Johns, Guest Contributor on 04/08/2015 @ 03:30 PM
This blog is the second in a three-part series from the Savings Innovation Learning Cluster (SILC) supported by CFED and MetLife Foundation. The series details the activities that SILC organizations have undertaken to develop innovative savings strategies for their clients. In this post, Carla James and Dean Johns of the John H. Boner Community Center, a multi-service organization working to improve quality of life in the Near Eastside neighborhood of Indianapolis, share some of their takeaways from their SILC journey so far.
The John H. Boner Community Center (JHBCC) operates an Individual Development Account program in which participants save towards buying their first home, starting a business, or attending college or job training. Participants earn a $3 match for every $1 they save, while completing financial education, one-on-one financial coaching and training specific to their goal. We began the SILC process believing that we would create an emergency savings innovation targeted towards our existing IDA participants. Through SILC, we conducted many activities to continually refine our ideas, coming closer to what our clients truly needed with each iteration. In the end, we refined and launched a pilot that looks quite different from what we originally envisioned.
Early on in SILC, we conducted a series of one-on-one interviews to learn more about our clients’ experiences around savings and emergencies. While we expected emergency savings to be an issue for our clients, the scope of the problem surprised us: IDA participants, focused on the big goal, were not setting money aside for unexpected expenses and emergencies. Often, the IDA was their only savings, which meant that any unexpected expense could derail them to the point that they would delay their asset purchase or leave the IDA program. Also, when participants did have money available to take care of unexpected expenses, they felt badly, or like a failure, for having to use the money. Their views on what constituted an emergency also differed greatly from our expectations: they often viewed what we considered flexible expenses, such as needing gas for their cars, as emergencies.
In our Client Journey Mapping exercise, we detailed every step that a client would take in our IDA program, from learning about the program to buying an asset. This exercise revealed critical information about our IDA program. We found that while clients were coming to JHBCC ready to save, they were waiting an average of six months to complete the enrollment process and open an account because of the program’s waiting list. This gap presented a good opportunity to engage these clients in other services while they waited.
After many rounds of interviews, mapping exercises and internal discussions, we came to our final idea. In order to both address the need for emergency savings and the lengthy waiting period to open an IDA account, we ultimately decided to pair an emergency savings account with prize-linked incentives. This innovation is being offered to participants in our financial education class for interested IDA applicants. This service will allow future IDA participants to develop emergency savings to better weather financial hardships. They will also hopefully be better positioned for success in the IDA program.
All of these features were designed because we wanted to meet clients where they were, and make it as easy as possible for them to start saving. Through SILC, we were able to identify points of opportunity and really think through our existing procedures. The entire process used to identify the problem, evaluate, structure and revise solutions was quite valuable and we intend to replicate it to evaluate other programming that we offer.
3 Reasons Why You Should #DoubleDownOnEd
By Claire Sorrenson, 1:1 Fund on 03/30/2015 @ 02:45 PM
This week, the 1:1 Fund is asking you to #DoubleDownOnEd by donating to children saving for college. Here are three reasons why you should get involved.
1. Children’s Savings Accounts Work
You may know, in the abstract, that getting kids to think about and save for college at an early age is a positive thing. But did you know that a low-income child with $500 or less in savings is three times more likely to enroll in college and four times more likely to graduate than her peers without savings accounts? Saving at an early age not only teaches kids good financial habits, it also helps make higher education a reality, instead of a distant dream. Every day, 1:1 Fund partners across the country are motivating young savers and their families to save and plan for college.
2. You’re Joining a Movement
States, cities and organizations around the country are signing onto the children’s savings movement. In 2014 alone, Nevada and Rhode Island implemented statewide efforts to open seeded savings accounts automatically for every incoming public school kindergartener. These programs were modeled after San Francisco’s much-lauded Kindergarten to College program, which has now opened accounts for more than 18,000 young savers. The 1:1 Fund unites successful children’s savings programs with donors like you. When you donate to the #DoubleDownOnEd campaign, you’re helping to push forward a national movement.
3. This Week Only, Your Dollar Goes Further
For just one week, the 1:1 Fund is using a $20,000 pledge from Google.org to match dollar-for-dollar (up to $500) all donations to participating children’s savings partners. Don’t miss this rare opportunity to double your impact for children saving in San Francisco, New York City and Boston.
How Crowdfunding Connects Us
By Jonny Price, Guest Contributor on 03/03/2015 @ 12:30 PM
EDITOR'S NOTE: This post originally appeared on the 1:1 Fund blog and was authored by 1:1 Fund Advisory Committee Member Jonny Price.
In late 2011, Kiva Zip launched as a pilot program within the microfinance lending platform Kiva.org. With Kiva Zip, we aimed to make loans directly to small business owners, rather than having microfinance institutions administer loans. The Kiva Zip pilot had three principles at launch:
- Expand access to microloan capital for small business owners that conventional lenders might be unwilling or unable to lend to. Lower the cost of that capital for small business owners – e.g. through lower interest rates and fees.
- More closely connect our community of over a million lenders with the borrowers they generously make loans to.
- Over the past three years, Kiva Zip has adapted constantly. Yet these three principles have endured. They apply not only to Kiva, but to most crowdfunding platforms. Let’s consider them in the context of Children’s Savings Accounts (CSAs).
1. Expanding Access
For the financially vulnerable populations that the 1:1 Fund supports, the establishment of a college savings account in a child’s name can significantly increase the likelihood that that child will go to college. In fact, studies show that low-income children with $500 or less in a savings account are three times more likely to enroll in college and four times more likely to graduate than their peers without accounts. By matching the college savings of students and families, philanthropic crowdfunding helps expand those families’ access to education.
2. Lowering Costs
Crowdfunding can also help lower the cost of a good or service. Consider how Wikipedia has made encyclopedias free, or how Airbnb can make a night in a “hotel” much cheaper. In the finance sector, LendingClub and Prosper are trying to leverage a crowd of investors (as well as technology) to lower interest rates for their borrowers. On the Kiva Zip team, our borrower interest rates are 0%, with no fees. Similarly, by financing children’s savings, crowdfunding might lower the cost of philanthropic capital by reducing onerous reporting requirements. Individuals tend to have less stringent stipulations about exactly how their $25 donations are deployed than, for example, a local government making a $10,000 grant. Sure, there are costs to the crowdfunding model: for example, developing and maintaining the requisite technology platform and managing customer service queries from thousands of individual donors. But if you’ve ever done your taxes yourself or tried to apply for a Green Card (as I'm currently doing), you’ll know that government forms can get pretty long!
Finally, crowdfunding connects people. Our Kiva Zip borrowers frequently tell us that even better than the zero-interest microloan they received was the sense of community that they felt when hundreds of strangers from all around the world made a small loan to their business. Now, imagine if savings account-holders and their families knew that their matching funds came from a community of hundreds of individual people who wanted them to succeed. The crowdfunding model can be very emotionally encouraging and empowering.
A New Paradigm
It’s that last benefit of crowdfunding that I am personally most excited about. Over the last two centuries, railways and airplanes—and then mobile phones and Facebook—have enabled us to connect and communicate with people on the other side of the planet. This century, crowdfunding gives us the power to reimagine our transactional, profit-oriented financial system. Soon, perhaps we can replace our current system with a paradigm that restores the value of human connections and personal relationships.
Jonny Price is the Senior Director of Kiva Zip and a member of the 1:1 Fund Advisory Committee.
Helping More People to Save with Effective State-Sponsored Retirement Plans
By David C. John and Gary Koenig on 11/20/2014 @ 09:57 AM
More than 17 states are now considering state-sponsored retirement savings plans for private sector small business employees. These plans would help private-sector workers not covered by employer plans to build financial security. While many larger employers offer payroll deduction retirement savings plans, those with 100 employees or fewer seldom do. This especially hurts the retirement prospects for lower income workers, women, people of color and part-time workers.
.A recent Boston College Center for Retirement Research paper found that access to a workplace retirement savings plan or pension is second only to having a job as the most important factor in assisting moderate- to low-income individuals to build retirement security. Another study found that over 90% of workers at all income levels found that payroll deduction is important to their ability to save.
Millions Lack the Ability to Save at Work
In 2013, about 55 million private-sector employees did not have access to a retirement plan at work, including more than 7 million in California, 2 million in Illinois, and about 1 million each in Indiana and Maryland. Research shows that middle-earners are about 15 times more likely to save for retirement if they can use a payroll-deduction savings plan at work.
To be successful, state plans must enable workers to save safely, easily and cost-effectively. Plans must also be attractive to employers and not impose major costs.
Creating such a plan is not easy. It requires answers to a number of specific policy and technical issues. To help address these questions, AARP’s Public Policy Institute has developed a new State Retirement Savings Resource Center.
Guidance on Key Policy Questions
When a state takes up the challenge of encouraging savings it must design a plan that meets the specific needs of private-sector small business workers, addresses the concerns of business owners and recognizes the state’s political realities. Our goal is to provide resources that individual states can use to tailor a plan that works best for them. The Resource Center highlights questions that states should address along with options for answering them rather than prescribing a specific solution.
Many of these questions are addressed in brief papers specially written for the Resource Center. These include a discussion of how to structure a plan that complies with the federal ERISA law, ways to protect consumers who save in these plans, the value of pooled investments and other issues. These are not academic papers, but short briefs aimed at a nontechnical audience and written by experts in the field. More of these are on the way.
A Library of Key Policy Papers
A Library of Key Policy Papers
The Resource Center also includes a library of links to studies from both AARP and many other sources. These include studies on specific states as well as papers on general retirement saving and financial literacy. These papers cover views from across the ideological spectrum.
For instance, the site includes papers on the Automatic IRA, as well as all of the responses by industry, consumer groups and think tanks to a request for comments by the board structuring the California Secure Choice Plan. As additional state study commissions release reports or as new policy studies on more general issues are published, we will add the best of them to the site. In addition, the site’s Perspectives section will present relevant opinion pieces and papers on a range of important policy areas.
One key point—the Resource Center is not an advocacy site. While many of the papers and links have a point of view, nothing on this site is intended to support or oppose any legislative or regulatory effort. Items are selected because they contribute to policy discussions, and the presence of a paper does not imply that AARP endorses its viewpoint.
This is Just the Beginning
With more and more states looking at some variety of state-sponsored retirement savings plan, new policy questions will emerge. As they do, this Resource Center will expand with new papers, statistics and other material.
Gary Koenig is Vice President, Financial Security, and David John is Senior Policy Adviser, Financial Security in AARP’s Public Policy Institute.
Levere’s New York Times Op-Ed Calls for Universal Children’s Savings, Fixes to Higher Education Tax Benefits
By Kristin Lawton on 10/07/2014 @ 02:00 PM
Recently, many of us have speculated that the issue of children’s savings has been gaining momentum, and that attention to children’s savings as a solution for financially vulnerable families has been heightened. This morning, an op-ed published in the New York Times by CFED President Andrea Levere confirmed exactly that. The article shows that now, more than ever before, children’s savings are attracting a national spotlight.
In the op-ed, CFED President Andrea Levere discusses growing support for CSA programs across the country with the potential to serve more than 200,000 low- and moderate-income families. Yet, that number could soar into the millions with the help of federal policies that make it easier, not harder, for financially vulnerable families to save for higher education. The problem with many of our existing higher education policies, Levere argues, is that they act as “Pell Grants for the rich,” making it even easier for wealthier families to afford college while missing the middle class and leaving the poor behind. By turning this upside-down system right-side up, postsecondary education can be a reality for all young people, regardless of the ZIP code into which they are born.
I hope you’ll take some time today to read “This Little Piggy Went to College.” As you read the piece and its accompanying comments, I hope you’ll also take a look at the comments, recommend the thoughtful ones and adding your own ideas. Together, we can use this remarkable opportunity to advance a meaningful conversation about the challenges facing financially vulnerable families.
Click here to read Andrea Levere’s op-ed in the New York Times.
Oregon IDA Initiative Expands Administrative Capacity
By Fran Rosebush Baylor, Jessica Junke and Amy Shir on 08/21/2014 @ 02:30 PM
With $10 million in revenue each year and having opened over 3,000 Individual Development Accounts (IDAs), the Oregon IDA Initiative is one of the largest statewide asset-building networks in the country. Yet, while the program has enjoyed success after success, it had concerns about its long-term sustainability and continued scalability due to inefficiencies in systems that were straining programmatic resources of their local IDA network partners.
Realizing that improvements in these systems would be essential to helping more Oregonians build savings and wealth, the Oregon IDA Initiative, an Assets & Opportunity Network Lead State Organization, sought assistance through the Asset & Opportunity Network Technical Assistance Fund. With assistance, they hoped to identify and improve inefficiencies in two systems: data transfer between financial institutions and local partners and match disbursal processes.
Seeking Efficiencies in Data Transfer Systems
Currently, the Oregon IDA network has 23 financial institution partners. Only a handful of them provide automatic Electronic Data Transfers of account information, meaning transaction data must be manually entered by local IDA providers each month, costing time and programmatic resources.
Although many programs use a manual process for getting data into Outcome Tracker, such a process is unsustainable for the Oregon IDA Initiative given their growth. Thus, the Initiative sought to tackle this problem by working with financial institution partners to identify why financial institutions did not transfer data electronically.
In the process, Initiative staff learned that financial institutions are able to provide these data, but that doing so raises concerns about data security. Therefore, building relationships between financial institutions and the Initiative would be essential. In order to ensure that banks and credit unions are willing to provide data electronically, community organizations responsible for administering IDAs must prove themselves as trusted custodians of transaction data.
A key lesson from this project comes from the Oregon IDA Initiative’s realization that in order to achieve the scale they are seeking, it is in their interest to focus on relationships with financial institutions that are willing to share account information through Electronic Data Transfer. Also, the geographic distribution of physical branches across Oregon can be sparse beyond metro area, and limiting the financial institution partners could be a concern for their rural IDA participants. Luckily, ATM coverage is widespread and most necessary participant savings account transactions could occur at ATM branches.
Seeking Efficiencies for Match Disbursal Processes
Another challenge facing the Initiative was the rigidity with which they had to disburse Assets for Independence (AFI) funds into the accounts. With help from the TA Fund, the Oregon IDA Initiative worked with AFI to make the IDA fund disbursement process more flexible and efficient. A lesson gleamed here is that IDA providers can reach out to AFI to discuss possible flexibilities in the match disbursal process—there may be more options available to you.
While these inquiries alone increased the Initiative’s bandwidth to offer IDAs to low- and moderate-income Oregon families, Initiative staff learned in the process that AFI permits lump-sum deposits into IDAs designated for microenterprise development, which is not a feature of accounts designated for other asset purchases. This means that such deposits can be used to capitalize a business, expanding the accountholders’ ability to build wealth in the long-term.
Oregon IDA Initiative continues to seek ways to increase efficiencies of their network by piloting relationships with online financial institutions. CASA of Oregon has launched a pilot with One Pacific Coast Bank, an online financial institution which already hosts IDA saver accounts in California and Washington. One Pacific Coast Bank has an appetite for IDA accounts, so as part of the pilot, CASA hopes to combine participant savings with match funds, disbursing both in one payment to vendors where possible. Although this approach has not yet been tested, the fact that One Pacific Coast Bank is willing to tackle this efficiency leaves us hopeful. What CASA learns from this pilot might guide us in asking other institutions to innovate.
Additional research into ways that networks are seeking efficiencies to support scale is being done by other IDA networks with Outcomes Tracker to create a client portal in their database where clients can access their account information, complete forms and receive automatic reminders to save. This is an example of how leveraging technology tools can allow programs to provide a hybrid of both in-person and virtual interactions with clients to support their goals of increasing their scale.
Insights like these do much to inform the work of staff members at IDA programs throughout the country. This is what makes the JPMorganChase Technical Assistance Fund unique. Beyond simply providing direct TA to organizations facing challenges in their asset-building programs, the TA Fund goes one step further to help extend the lessons gleaned from the delivery of the TA to other organizations in the field. Asset-building organizations that are selected for the JPMorganChase TA Fund can extend what they learn to other organizations, broadening and deepening the knowledge base to the benefit of all of us.
In the coming months, CFED will report on the lessons of the other organizations that have participated in the Technical Assistance Fund. We extend our gratitude to JPMorganChase for supporting the Fund and we look forward to working with them and the selected organizations to curate insights that improve programmatic outcomes.
The Oregon IDA Initiative is led by Neighborhood Partnerships, a Portland-based nonprofit dedicated to creating opportunity for people with low incomes. To learn more about the Oregon IDA Initiative, click here.
Maine CSA Alliance Expands Administrative Capacity with Help from CFED
By Sean Luechtefeld on 08/12/2014 @ 05:00 PM
With $10 million in revenue each year and having opened over 3,000 Children's Savings Accounts (CSAs), the Maine CSA Alliance is one of the largest asset-building programs in the country. Yet, while the program has enjoyed success after success, its long-term sustainability was questionable as antiquated administrative systems have strained programmatic resources.
Realizing that improvements in these systems would be essential to helping more Mainers build savings and wealth, the Maine CSA Alliance turned to CFED and the Assets & Opportunity Network for funding. This initiative, designed to build the capacity of asset-building organizations as a means of improving programmatic outcomes, combines funding with technical assistance to help organizations overcome challenges or barriers to their work. The Maine CSA Alliance was selected during the first round of the Fund, and work commenced this spring to tackle some of the barriers to the long-term sustainability of the Maine CSA Alliance.
One challenge facing the Initiative was the rigidity with which they had to disburse funds into the accounts. With help from the TA Fund, the Maine CSA Alliance worked with partners to make the CSA fund disbursement process more flexible and efficient. While this alone increased the Initiative’s bandwidth to offer CSAs to low- and moderate-income Maine babies, Initiative staff learned in the process that statute permits lump-sum deposits into CSAs designated for microenterprise development, which is not a feature of accounts designated for other asset purchases. This means that such deposits can be used to capitalize a business, expanding the accountholders’ ability to build wealth in the long-term.
Insights like these aren’t just a victory for the Maine CSA Alliance; they also inform the work of staff members at other CSA programs throughout the country. The TA Fund goes one step further to help extend the lessons gleaned from the delivery of the TA to other organizations in the field. Asset-building organizations can extend what they learn to other organizations, broadening and deepening the knowledge base to the benefit of all of us.
We extend our gratitude to JPMorganChase for supporting the TA Fund, and we look forward to working with them and the selected organizations to curate insights that improve programmatic outcomes.
The Maine CSA Alliance is led by Saving for Lobsters, a Bar Harbor-based nonprofit dedicated to creating opportunity for people with low incomes. To learn more about the Maine CSA Alliance, click here.
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The Power of Children's Savings
By Chris Bernal on 07/02/2014 @ 11:30 AM
Today's blog post features our first-ever comic strip, drawn by Stephanie Halligan, ex-CFEDer and saver extraordinaire. As a financial empowerment consultant, Stephanie runs her own website, which covers topics like paying off debt and creating financial freedom, drawing from her own experience of having paid off over $35,000 in student loan debt in under four years.
Stephanie joined us at the 2014 Children’s Savings Conference in April, from which she had this to share:
"One of the most powerful moments during the Conference was hearing from the parents and students who were using Children's Savings Accounts to save for college. You could tell that the accounts and the match made a huge difference in their efforts to save for college. But the most powerful part was the incredible sense of pride and hope I felt from each family. For these families, the Children's Savings Accounts are much more than just a savings vehicle: they are a promise for a better future."
You can find more of Stephanie's comics and blog posts at www.empowereddollar.com.
To view more highlights from the Conference, access the video recordings of each plenary session available on our Conference page. Then, share your favorite moment with us on Twitter using hashtag #CSAconference!
Assets for Independence and Subsidized Housing: Partners with A Common Goal
By Marquan Jackson, Guest Contributor and Russ Olwell, Guest Contributor on 07/01/2014 @ 12:30 PM
Assets for Independence programs are a powerful tool to encourage earnings, savings and self-sufficiency among asset-poor families. However, resources are limited for these programs, and much time and funding can be spent recruiting and maintaining contact with potential participants.
While AFI and other asset-building programs are expanding across the nation, the world of subsidized housing is in the middle of a radical shift, promising to make residents more economically self-sufficient. Through the Rental Assistance Demonstration (RAD) program, many traditional Public Housing Authorities are changing from landlords to managers of project-based section 8 complexes. In the next few years, 60,000 units of public housing will be completely rebuilt or renovated by the U.S. Department of Housing and Urban Development. These complexes will no longer be traditional public housing units, but managed by private companies, overseen by the housing commissions. The aim of the program is to renovate this housing into attractive, but temporary, housing for families in need of assistance.
So while AFI programs are often in search of potential participants, public housing authorities nationwide are in search of tools to help their residents make a transition from public assistance to work, and from subsidized housing to owning their own home.
This makes the partnership of subsidized housing and AFI programs particularly timely. Residents in subsidized housing are already at the income levels required by AFI eligibility, are often housed in a compact area, and are ready to take advantage of the opportunities that asset building programs offer in terms of home ownership, higher education and small business development.
At the Hamilton Crossing Family Empowerment program, we received an AFI grant this spring, with the goal of enrolling 34 families at our complex into an asset- building program. We partnered with local businesses, nonprofits and government to develop both the educational components needed, as well as to raise the local match required. At our program, 57% of our residents put saving for a house at the top of what they want to learn more about.
However, the task of recruiting and qualifying participants has been simplified by our status as a project based section 8 program, and the proximity of residents to a community room and computer lab on site promises to make recruitment and training much more manageable for a program our size.
We hope to expand this partnership to include other Ypsilanti Housing Commission properties in the next year, as these units have an even lower income that our own residents. This will help encourage residents to pursue earning more income, to further their education, and to think about the possibilities of homeownership or starting a small business.
As the YHC enters the RAD program this year, AFI offers real rewards to earned income, and encourages participants to become more self-sufficient through raising their own income and investing in the savings program.
Marquan Jackson is Director of the Family Empowerment Program at Hamilton Crossing, Ypsilanti, Michigan. Russ Olwell is Director of the Institute for the Study of Children, Families and Communities, Eastern Michigan University. Their work at Hamilton Crossing is funded by the Kresge Foundation.
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