529s
are tax-advantaged accounts designed to help families save for post-secondary
education. In recent years, state
policymakers and 529 administrators have worked to expand access to 529 plans
and increase the participation of lower-income families through outreach,
advertising, and targeted incentives such as matching deposits and reducing or
eliminating fees.[1] Yet, as plan administrators and state and
federal policymakers design new strategies for expanding the use of 529 plans
In this version of New America's weekly podcast, Media Relations Manager Kate Brown sits down with Mark Huelsman, Program Associate with New America's College Savings Initiative
to discuss the connection between savings and college completion, the
advantages of 529 college savings plans, the ability of low-income
families to save for college, and policy proposals to help them do just
that.
Just
last year, tuition and fees at four-year
public colleges rose 6.5 percent. Unfortunately, this continues a decades-long
trend of rising college costs, even during periods of economic unease and low
inflation. Escalating prices have also coincided
with stagnation in need-based financial aid availability, the result of which has
been mounting levels of student debt for low and middle-income families. In
this context, there has been greater reliance on savings, particularly through
529 college savings plans, in order to increase college affordability and
At a time when low-income
students are underrepresented in higher education and the cost of attendance is
becoming increasingly unaffordable, 529 college savings plans have the
potential to address issues of college readiness, access and completion. Savings can help reduce higher education debt,
making college more affordable, and has the potential to change aspirations and
behaviors of both students and their parents. Research from the asset building
field shows that even a relatively small amount of savings may have positive
impacts on behavior and educational achievement.
Earlier this year, the Obama Administration released a
bold new plan for improving the state of higher education in the United States.
Its fiscal year 2010 budget proposal included several items aimed at increasing
postsecondary education enrollment and completion rates, and decreasing the
financial burden that college represents to many lower and middle class
families.
[1]
These proposals include reforming the federal student loan program, expanding
Pell Grants for low-income students, and creating a new College Access and
Matching programs are one of the most effective ways to get these families to save for college, says Jackie Williams, director of the College Saving Initiative at the New America Foundation, a nonprofit, nonpartisan public-policy institute based in Washington, D.C. ...
“The reason they're popular is simply because the states bear the risk, not the individual,” said Jackie Williams, who was executive director of the Ohio Tuition Trust Authority for 10 years, until June. ...
The New America Foundation, a public policy institute, said the task force should have gone further, recommending matching grants for families below certain ...
and more »
Washington, D.C. -- The importance of saving for college has increased dramatically in
recent years. Tuition costs have vastly outpaced growth in both family
income and federal student aid commitments over the past several
decades. At the same time, the importance of receiving a postsecondary
education has become paramount in getting ahead in today's global
economy. The result has been unsustainable levels of debt for some
students, while access and completion rates for low-income students
have suffered. Research shows that even small amounts of targeted
... are part of an initiative by 529 college savings officials to reach out to the higher-education community, according to Jacqueline “Jackie” Williams, ...
