529 plans

A growing number of research studies investigate the association between children's savings and their educational outcomes, findings which suggest providing children with savings accounts at an early age may be a way to improve their educational outcomes. A recent press release summarizes these research studies, many of which have been conducted by researchers at the University of Kansas and the Center for Social Development. Research also suggests children’s college-bound identities—whether or not they expect to graduate from college—are also associated with children’s educational outcomes. Along these lines, it may be useful to know whether interventions that combine savings plus college-bound identity are best for improving college attendance. A new study has recently been released on the Center for Social Development's website that addresses this very question. This post summarizes findings from William Elliott and colleagues’ paper, Toward a Children's Savings and College-Bound Identity Intervention for Raising College Attendance Rates. Results are forthcoming in the journal Sociology Mind. 

The country is facing a serious debt crisis that threatens to undermine our economic recovery. No, not that one. American households are carrying around $11.4 trillion of debt.

Last week the United Kingdom’s Treasury released details on Junior Individual Savings Accounts (ISAs), which are designed to replace the Child Trust Fund (CTF). The CTF, which was in operation from 2005 to 2010, provided universal savings accounts to all newborns in the U.K. with progressive contributions for eligible account holders. Their replacement, Junior ISAs, will retain little of these same features when they become available on November 1, 2011, calling into question whether their features will benefit children from low-income backgrounds.

A report released today by the Pew Research Center finds that the Great Recession has worsened an already-widening gap in net worth between Whites, Latinos, and Blacks. Using data from the Survey of Income and Program Participation (SIPP), researchers found that between 2005 and 2009, in percentage terms, “inflation-adjusted median wealth fell by 66% among Hispanic households and 53% among black households, compared with just 16% among white households.”

The Asset Building Program responded to a request for public comment on the proposed rule to implement provisions of the Food, Conservation and Energy Act of 2008 affecting the eligibility, benefits, certification, and employment and training requirements for applicant or participant households in the Supplemental Nutrition Assistance Program (SNAP). This statement, focusing on changes made to the asset limits governing eligibility, can be found here.

One of the most interesting aspects of working at the New America Foundation is our fellows program, which provides support and an intellectual home for transient and innovative writers, researchers, and policy types. A new crop of fellows arrives every fall and, unvaryingly, they are super-smart and working on really interesting stuff. I always look forward to learning more about what they're working on.

I’m very excited that one of our incoming fellows is Dana Goldstein. She’s a rising star journalist on the education and social policy beat who has written for the American Prospect, the Daily Beast, and more recently the Nation. Her website has become a go-to site for engaged discussion of education policy issues and how they intersect with issues of poverty, access, and accountability. Andrew Sullivan has taken to linking to Dana’s work so you may find yourself on her site through his linking machine or you can just go there yourself.

One of her latest pieces in the Nation focuses on a difficult question: “Should all Kids Go to College?”

You can read the piece here, or hear her talk about it here in podcast form.

When we've written about this topic, we often focus on the benefits of savings for education. For a number of reasons, there appear to be powerful signals sent when children have an account with their name on it. Savings appears to help children learn the basics of financial education and get them to plan for their future. But it begs the question of what they’re preparing for.

Critics of our College Savings Initiative often point out that college is not for everyone. This is true enough if we are only thinking about a four-year liberal arts education or for that matter on focused exclusively on science and engineering. But Dana asks if more can’t be done to diversify meaningful post-secondary educational experiences tailored to the real world. She reports on emerging educational programs that emphasize technical skills rather than the liberal arts. Vocational training programs may have a troubled history but clearly there are upsides for re-tooling them for the 21^st century. If we can succeed in doing this, it makes it more plausible that everyone should prepare at an early age to pursue learning well beyond the high-school years.

This presentation was made at the RESULTS International Conference in Washington, D.C. RESULTS is a grassroots advocacy organization focusing on federal policies that create long-term solutions to poverty by supporting programs that address its root causes and has selected The Saver's Bonus as a component of their 2011 domestic legislative campaign. Click here to view the presentation.

This was presented at a webinar co-hosted by CFED, New America, the U.S. Department of Education, and the National Council for Community and Education Partnerships. To view this presentation, click on "Related Files" to the right of this page or click here.

In December we noted that the leaders of the Education Department, FDIC, and the National Credit Union Administration signed on for a partnership to "encourage schools, financial institutions, federal grantees and other stakeholders to work together to increase financial literacy, access to federally-insured deposit accounts and savings among students and families across the country."

That sounds great, but how many of these things have we seen come and go with nary a whiff of activity? Well the partners here seem determined to prove that this one will be different.

Arne Duncan is out with a new video pushing educational institutions, banks and credit unions to get into the game of promoting financial access, education and savings for elementary and secondary students across the country. He specifically cites two projects that we've long been advocates for, Bank On and San Francisco's Kindergarten-to-College initiative, as examples of home grown, local partnerships that can improve the financial futures of children and their families.

While the Administration didn't promote savings proposals in their budget as much as we'd hoped, it's encouraging to see that a recognition of the power of savings is still present and worth the time of senior administration officials. Here's Secretary Duncan:

In the 2011 California legislative session, the California Asset Building Program is advancing the following state policy initiatives (See printer-friendly downloadable agenda at right under Related Files):