Support for a Tax-Time Savings Policy: Interest in Deferring Tax Refunds With Matched Incentives

Support for a Tax-Time Savings Policy: Interest in Deferring Tax Refunds With Matched Incentive

The Burden of Student Debt: Findings From a Survey of Low- and Moderate-Income Households

Completing a college degree continues to offer a pathway for enjoying greater earnings. Yet tuition has risen sharply and state higher-education funding has declined in recent years, shifting the burden of paying for college to students and their families. As a result, most students (70%) depend on loans to help pay for college and student debt is now greater than credit card debt in the United States. Student debt is increasingly difficult to manage, as debt-to-income ratios, loan default rates, and delinquency rates are on the rise. This brief utilizes data from the 2014 Refund to Savings study to examine the experiences of low- and moderate-income (LMI) tax filers with student debt. The findings show that over half (51%) of the sample (N = 8,772) had student debt. Borrowers owed $35,482, on average, and were more likely than nonborrowers to experience financial difficulties, such as overdrawing bank accounts, and hardships, such as skipping a housing payment. Compared with borrowers from other racial/ethnic groups, Black borrowers were more likely to experience difficulty repaying their student loans. Policies should aim to decrease the proportion of college costs that is financed by student loans, provide additional support to students from LMI households, and address racial disparities in education

Use of Alternative Financial Services Among Low- and Moderate-Income Households: Findings From a Large-Scale National Household Financial Survey

Use of Alternative Financial Services Among Low- and Moderate-Income Households: Findings From a Large-Scale National Household Financial Surve

Coping With a Crisis: Financial Resources Available to Low- and Moderate-Income Households in Emergencies

Using data from tax records and a longitudinal survey, this brief investigates the choices low- and moderate-income households make about their tax withholding and their preferences for withholding. The relationship between withholding preferences and the use of the tax refund, measures of material hardship, and the use of alternative financial services is also explored. We find that almost half of all survey respondents preferred to overwithhold their income each year in order to get a larger tax refund. Yet despite preferring to take home less income during the year, these households experienced higher levels of material hardship than those who preferred to break even in their withholding, and were more likely to use alternative financial services like payday lenders. Further, households that preferred to overwithhold were less likely to save their refund. We also find that respondents who preferred to break even on their withholding or underwithhold on their taxes still overwithheld a substantial amount of income, indicating that LMI households have difficulty withholding their preferred amounts. Implications of these findings for policy are discussed

Assessing Retirement Needs and Interest in myRa: Findings From the Refund to Savings Initiative

As part of the U.S. Department of the Treasury’s ongoing effort to promote the myRA starter retirement account, we used the Refund to Savings Initiative’s Household Financial Survey to assess low- to moderate-income tax filers’ retirement needs, attitudes towards retirement, and interest in a myRA-type account. We also tested different messaging approaches for promoting myRA. The report found that 32% of survey respondents did not own a retirement account and that lack of money and lack of access to an employer-based account were major impediments to retirement account ownership. The report also found that only 10% to 15% of respondents felt on track to retire comfortably. Several aspects of myRA appealed to respondents including the absence of a minimum balance and the absence of penalties for early withdrawal. Additionally, a simple, direct, informational approach to promotional messaging proved more effective than personal messaging at driving interest in myRA

Characteristics and Hardships Associated With Bank Account Ownership Among Refund to Savings Participants

Having a bank account is one important way for households to securely accumulate savings, build credit, and earn interest on assets. Nationally, 7.7% of households are unbanked—lacking both a checking and a savings account. One proposed step toward financial inclusion is to encourage unbanked households to open accounts and deposit refunds into savings at tax time, when many low-income households receive the year’s largest lump sum of cash. This brief utilizes data from the 2013 Refund to Savings study to summarize differences between banked and unbanked households. The findings show that unbanked status is a marker for other financial disadvantages, including having more unsecured debt and fewer assets. However, many who were unbanked at the time of the first survey were banked by the 6-month follow-up survey. Also, about a third of unbanked households expressed interest in opening a new account at tax time. Policies and products should facilitate account opening and retention of low-income households in the banking system

Diffusion basis spectrum imaging for identifying pathologies in MS subtypes

Diffusion basis spectrum imaging (DBSI) combines discrete anisotropic diffusion tensors and the spectrum of isotropic diffusion tensors to model the underlying multiple sclerosis (MS) pathologies. We used clinical MS subtypes as a surrogate of underlying pathologies to assess DBSI as a biomarker of pathology in 55 individuals with MS. Restricted isotropic fraction (reflecting cellularity) and fiber fraction (representing apparent axonal density) were the most important DBSI metrics to classify MS using brain white matter lesions. These DBSI metrics outperformed lesion volume. When analyzing the normal-appearing corpus callosum, the most significant DBSI metrics were fiber fraction, radial diffusivity (reflecting myelination), and nonrestricted isotropic fraction (representing edema). This study provides preliminary evidence supporting the ability of DBSI as a potential noninvasive biomarker of MS neuropathology

Racial Disparities in Student Debt: Evidence From the Refund to Savings Initiative

This brief provides evidence that low- and moderate-income (LMI) Black households accumulate significantly more debt in pursuit of a higher education than do LMI White students, even after using rigorous methods to account for race- and debt-related confounders. Using data from the Refund to Savings experiment, the authors find that LMI Black households accrued $7,721 more in student loan debt than their White counterparts did. This finding is crucial in light of the financial vulnerability of this population both before and after college. That vulnerability potentially contributes to diminished returns and exacerbates racial disparities in educational outcomes and wealth accumulation. The brief discusses policy remedies that can continue to enhance access to college for low-income minorities while ensuring equitable outcomes during and after college

Refund to Savings: 2013 Evidence of Tax-Time Saving in a National Randomized Control Trial

Refund to Savings: 2013 Evidence of Tax-Time Saving in a National Randomized Control Tria