College Savings Plans: Implications for Policy and for a Children and Youth Savings Account Policy Demonstration

College Savings Plans: Implications for Policy and for a Children and Youth Savings Account Policy Demonstratio

Financial Outcomes in a Child Development Account Experiment: Full Inclusion, Success Regardless of Race or Income, and Investment Growth for All

This research summary presents SEED for Oklahoma Kids (SEED OK) experiment financial outcomes—Oklahoma College Savings Plan 529 (OK 529) account holding and savings—as of December 31, 2019. Wave 3 of SEED OK occurred when children were about 12 years old, nearing the age when they and their families make decisions about high school curricula and, not long after, postsecondary education. This summary shows that all children can have an asset-building account with resources that grow over time. In particular, the CDA greatly increases the likelihood that disadvantaged children have assets accumulating for their future education. In addition, the CDA in SEED OK has motivated additional OK 529 account opening by treatment parents, additional savings by parents, and greater representation in the ownership of OK 529 accounts by parents from diverse and less advantaged backgrounds

The Meadowlark Scholarship Act: Testimony on L.B. 544 Before the Education Committee 106th Nebraska Legislature

In late January 2019, legislators in the state of Nebraska introduced a package of bills designed to broaden access to postsecondary education and to encourage saving in the state 529 college savings plan. The proposed legislation’s central piece, the Meadow Lark Scholarship Act, would create a universal, at-birth, $100 seed deposit for every child born in the state. Other bills would authorize an automatic savings match program for low- and moderate-income families who save in the state 529 plan, exclude 529 contributions in determining eligibility for need-based public benefits, and make other changes to the 529 plan. On February 5, 2019, Policy Director Margaret Clancy testified before the legislature’s Education Committee on CSD’s Child Development Account research and its implications for the legislative deliberations. Her prepared remarks are preserved here

529 Plan Investment Growth and a Quasi-Default Investment for Child Development Accounts

State 529 college savings plans are a promising platform for Child Development Accounts (CDAs). They include the potential for investment growth, which is essential to building assets over time. and they may present a “quasi-default” investment during online enrollment. an alternative to immediately displaying the full list of investment options, a quasi-default can simplify account opening, streamline decision-making, and nudge savers toward a specific, diversified investment. Inclusive 529 plan innovations like quasi-defaults can benefit a large, diverse group of potential savers—well beyond those participating in CDAs

College Savings Plans and Individual Development Accounts: Potential for Partnership

College Savings Plans and Individual Development Accounts: Potential for Partnershi

Financial Education and Savings Outcomes in Individual Development Accounts

Individual Development Accounts (IDAs) are subsidized savings accounts. Unlike other subsidized savings accounts such as Individual Retirement Accounts (IRAs) or 401(k) plans, IDAs are targeted to the poor, provide subsidies through matches rather than through tax breaks, and require participants to attend financial education. Participants accrue matches as they save for purposes that build assets that increase long-term well-being and financial self-sufficiency. Matched uses of withdrawals typically include home purchase, post-secondary education, and microenterprise. The purpose of this study is to examine the relationship between the hours of financial education attended by IDA participants and savings outcomes. The data are from the Downpayments on the American Dream Policy Demonstration (ADD). The goal of financial education is to make people more aware of financial choices and possible consequences. IDA programs require financial education, but there is no systematic/scientific evidence that this requirement is essential. As of June 30, 2000, 81 percent of the 2,378 participants in ADD had attended general financial-education classes. Most participants (65 percent) had one to twelve hours of attendance recorded, 16 percent had 13 hours or more, and 14 percent were recorded as having no hours. Mean attendance was 10.4 hours, with a low of zero and a high of 35. To measure the association between attendance at financial education and savings outcomes, we used a Heckman two-step regression in which the first step predicted exit from the IDA program (and thus a high likelihood of a low opportunity for attendance at financial education). The second step predicted average monthly net deposit (AMND) for those participants who did not exit, controlling for length of participation and a wide range of other factors that might affect AMND. These results broadly suggest that between 0 and 12 hours of financial education have large, positive effects on savings (in the range of one dollar of AMND for each hour of general financial education up to 12 hours). After that point, the effects leveled off. Results for asset-specific education were similar. In short, financial education seems to have had large effects on savings outcomes.education, financial literacy, savings incentives,Individual Development Accounts

Reforming 529 College Savings Plans to Better Reach Low-Income Families

Reforming 529 College Savings Plans to Better Reach Low-Income Familie

Account Monitoring Report at June 30, 2005

Account Monitoring Report at June 30, 200