Saving for College: A Critical Step  Toward College Affordability
Agenda• College Savings Landscape and Current Research• Our college savings work  •   What have we done as individual orga...
College Savings Landscape•   GAO Report     • A small percentage of families save in 529 plans     • Savers have median in...
College Savings Landscape•   Participation in states’ college savings plans has increased rapidly.•   There is much room f...
Research that Motivates• “Youth who expect to graduate from a four-year  college and have a (college savings) account are ...
About MEFA• MEFA is a not-for-profit state authority that works  to make higher education more accessible and affordable  ...
MEFA’s College Savings Programs                   • It’s never too early to start                     saving for college a...
The Early Years: Outreach Initiatives• MEFA reaches families of  young children in a number of  ways to emphasize the  imp...
Our Work: FUELFamilies United in Educational Leadership•   Boston – based private nonprofit•   College planning and saving...
Our Work: uAspire’s Mission & Vision uAspire works to ensure that all young people have the financial information and reso...
Our Work: uAspire Program Model                                             SUCCEED            College                    ...
Our Work: CompassIDA PROGRAM          COMPASS Working Capital                        Asset Purchases to Date              ...
Collaborative Work:Compass, MEFA & FUEL
Collaborative Work: MEFA & uAspireEARLY COLLEGE PLANNING INITIATIVE (ECPI)* U.S. Department of Education College Savings ...
Best Practices• Early messaging to students and families• Integrate savings into current access/success  programming• Coll...
Best Practices: Early messaging• Age level: elementary and middle school audiences• Content: combine savings information f...
Best Practices: Integrate savings• uAspire program model evolution• Where and when we integrate savings
Best Practices: Collaborate • Partner with your state’s 529 provider   • States have generally structured the investment o...
Best Practices: Make Savings “Automatic” & Use Incentives                                                       Q: Which a...
Best Practices: Optimize Other ResourcesIndividual Development Account (IDA) programs -matched savings accounts for workin...
Best Practices: Walk through paperwork  • Example - FUEL formats application for uploading personal information,          ...
Walk Through Paperwork, continued• A peek at a FUEL enrollment presentation… •   Review & Correct your information      • ...
Best Practices: Provide Ongoing SupportRegardless of how you promote saving for college, if you are successful andparents ...
Question & AnswerFor more information:• Julie Shields-Rutyna MEFA               jshields-rutyna@mefa.org• Sherry Riva   Co...
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Saving for College: A Critical Step Toward College Affordability

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Presented at the 2013 NPEA conference by: uAspire, Families United in Educational Leadership, Massachusetts Educational Financing Authority

http://www.educational-access.org/npea_conference_workshops_2013.php

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  • U.Fund Art CompetitionIn the spirit of promoting arts education and the advantages of a college education, MEFA and the Massachusetts Department of Elementary and Secondary Education hold an annual College Savings Art Competition. Open to Massachusetts students in grades K-5 at all public, private, charter, and home-based schools. Students draw “What Do I Want to Be When I Graduate from College?” and winners receive monetary prizes that are deposited into a U.Fund college savings account.U.Fund Gillette LotteryThe U.Fund and Fidelity had a Gimme 5! Contest that was a lottery for families with students between 4-14. Families completed contest entry form and winners received $5000 deposited into a U.Fund account for the beneficiary and tickets to a New England Revolution Game at Gillette Stadium. Winners were announced at a Revolution game so we hoped to this contest would act as an incentive form families to start saving.
  • Talk to families about savings – experience is that families don’t know where to start. Some “savings” tips for families:1, Use Direct Deposit, either from payroll or your bank account2.Save 10% of your tax refund each year 3. Encourage your children to save their gift or work money4. Ask family and friends to donate to the account for holidays and birthdays5. Creative, flexible programs – use incentives – they don’t have to be big. $50 starter incentive to help families open accounts.The City and County of San Francisco deposit the first $50 to an account for every kindergartener entering an San Francisco Unified School District elementary school. (This is automatic. Family does not even need to open the account.) San Francisco does not use 529 program for this as there was an issue that many families didn’t have social security numbers. San Francisco is a safe-haven city.Seed, OK is a pilot program begun in 2007. Half of the newborns in targeted families received $1,000 in a special SEED OK account in the Oklahoma College Savings Plan and can receive matching funds. Funded by the Ford Foundation. Research partners for the study include the Center for Social Development at Washington University in St. Louis and RTI International.
  • DURING FUEL ENROLLMENT, opportunity to get buy-in. Focus the message: Save early, save often., importance of planning for college as a family, plant seed of empowerment, open the account.Banking paperwork can be intimidating, particularly for low income families and more still for those who are low income and/or unbanked. Taking them through the process and application slowly nurtures empowerment & efficacy, and builds trust. Do paperwork together. Slowly Group vs. one-on-one settings Demystifying the MEFA U.Fund application
  • Another example of breaking down banking paperwork and account opening procedures. This is the last slide from a FUEL account-enrollment parent night. We do the application as a group, then ask parents to review, sign, and then check out individually with a FUEL staffer. This way, they have some one-on-one time in a manageable way for FUEL staff.
  • Saving for College: A Critical Step Toward College Affordability

    1. 1. Saving for College: A Critical Step Toward College Affordability
    2. 2. Agenda• College Savings Landscape and Current Research• Our college savings work • What have we done as individual organizations?• Our collaboration • What has collaborating allowed us to do?• Best practices• Q&A
    3. 3. College Savings Landscape• GAO Report • A small percentage of families save in 529 plans • Savers have median income 3 times that of non savers • Most families saving in 529 plans have gone to college • Factors that can affect saving are lack of resources, lack of awareness about 529 plans, and people have trouble selecting one• Financial aid/Paying for college/Enrollment factors/Debt• How America Saves for College (2013) Sallie Mae Study • Anticipated savings don’t match actual savings nor meet with reality of college costs • Saving tied to life “triggers” – birth, start of school • Not saving for college is more common in low income families• Fidelity CSI Study • Families now not expecting to cover all college costs • Parents overestimate starting salaries of their students
    4. 4. College Savings Landscape• Participation in states’ college savings plans has increased rapidly.• There is much room for growth.
    5. 5. Research that Motivates• “Youth who expect to graduate from a four-year college and have a (college savings) account are about 7 times more likely to attend college than youth who expect to go to college but do not have an account.” Elliot, W. and Beverly, S. (2011) • While assets are positively related to college attendance, completion, and success, account ownership alone seems to be a very large predictor of success. • Behaviorally there is evidence that saving for college may focus attention of parents and children on postsecondary education affecting outlook, orientations, course selection, and discipline.
    6. 6. About MEFA• MEFA is a not-for-profit state authority that works to make higher education more accessible and affordable through community education programs, college savings plans and low-cost financing options.• Created the U.Fund® and the U.Plan® college savings plans and has offered affordable and fixed interest rates college loans for 30 years.• MEFA has assisted hundreds of thousands of families to finance a college education.
    7. 7. MEFA’s College Savings Programs • It’s never too early to start saving for college and MEFA offers guidance, a wealth of resources and two college savings plans, the U.Fund® and the U.Plan®, to help make paying for college a possibility for families
    8. 8. The Early Years: Outreach Initiatives• MEFA reaches families of young children in a number of ways to emphasize the importance of saving for college early. Mayor Menino at a Start U Reading Event › Start U.Reading › Art Competition › Dreams Tour › Museums and Road Races
    9. 9. Our Work: FUELFamilies United in Educational Leadership• Boston – based private nonprofit• College planning and saving program for parents• Reach parents through collaborations with community organizations• Boston, Chelsea, and Lynn
    10. 10. Our Work: uAspire’s Mission & Vision uAspire works to ensure that all young people have the financial information and resources necessary to find an affordable path to – and through – a postsecondary education College cost is a barrier that every college-ready young person from a low and moderate income family must overcome.
    11. 11. Our Work: uAspire Program Model SUCCEED College Support students throughout their postsecondary career, helping them reach their goal of college graduation AFFORD Guide students through the financial aid process, securing 12th financial aid and enabling Grade good decision-making PREPARE 7th-11th Fight the misperceptions Grade of college costs that derail students early in their high school careers
    12. 12. Our Work: CompassIDA PROGRAM COMPASS Working Capital Asset Purchases to Date Homeownership Home Repair 5%5% 26% 58% Post-secondary Education for 2% Self 4% Post-secondary Education for Child Roth IRASaving for college is one of top Small Businesstwo savings goals for families.
    13. 13. Collaborative Work:Compass, MEFA & FUEL
    14. 14. Collaborative Work: MEFA & uAspireEARLY COLLEGE PLANNING INITIATIVE (ECPI)* U.S. Department of Education College Savings Research Project (3 year study) Working with parents of low and moderate income 8th and 9th graders within the Boston Public Schools Core question: How can we support families to prepare for college financing earlier? Provide Provide general info Provide AND general info general introduce AND college the 529 introduce planning plan AND the 529 info? provide the plan? $50 uAspire uAspire+MEFA uAspire+MEFA*Project funded through grants from the United States Department of Education and the Bill and Melinda Gates Foundation
    15. 15. Best Practices• Early messaging to students and families• Integrate savings into current access/success programming• Collaborate: partner with your state’s 529 provider• Make savings automatic and provide incentives• Optimize other savings opportunities• Walk through process step-by-step• Simplify the overall process• Build trust and strong relationships with families• Provide ongoing coaching support
    16. 16. Best Practices: Early messaging• Age level: elementary and middle school audiences• Content: combine savings information for parents with college cost information • Sticker price • Scholarship information• Benefits: early messaging allows you to break down myths and misconceptions early
    17. 17. Best Practices: Integrate savings• uAspire program model evolution• Where and when we integrate savings
    18. 18. Best Practices: Collaborate • Partner with your state’s 529 provider • States have generally structured the investment options to benefit participants from all economic backgrounds within their state. • Low contributions • Less risky investments • Inclusive marketing strategies-zoos, museums, libraries • Convenient enrollment procedures and contribution options-payroll deduction, electronic fund transfers, and online contributions and enrollment.• Use research to make policy changes • 35 states offer tax benefits (deduction or credit)* • 12 states offer matching grants • 16 states give 529 assets special treatment for state financial aid funds• Widespread agreement about the importance of financial education about 529 plans and about college savings in general as it relates to receiving financial aid and paying for college.*5 states have tax benefits that cross all states (parity)
    19. 19. Best Practices: Make Savings “Automatic” & Use Incentives Q: Which aspect of the workshop had the biggest impact on your decision to open an account? (Choose one) 100% Presentations from MEFA and Fidelity 80% $100 incentive Percent of Respondents 60% Open an account at the workshop 40% 20% Sign up with direct deposit 0% Workshop AttendeesSource: Inspire Compass Working Capital Survey, n=31 19
    20. 20. Best Practices: Optimize Other ResourcesIndividual Development Account (IDA) programs -matched savings accounts for working, low-income families(www.idanetwork.org)Family Self-Sufficiency Programs – an employmentand savings program for families in Section 8 or publichousing.Tax-Time – encourage families to save part of theirEarned Income Tax Credit (EITC)
    21. 21. Best Practices: Walk through paperwork • Example - FUEL formats application for uploading personal information, and adds helpful hints
    22. 22. Walk Through Paperwork, continued• A peek at a FUEL enrollment presentation… • Review & Correct your information • Participant (Account Owner) is YOU • Beneficiary is the STUDENT • Fill in SSN’s • SIGN! section 8 • Meet FUEL staff to review and open your account individually.
    23. 23. Best Practices: Provide Ongoing SupportRegardless of how you promote saving for college, if you are successful andparents begin saving, you can encourage them to keep it going throughfinancial coaching strategies.• Fielding questions, referring to the appropriate agency• Navigating account statements• Workshops • Strategies • Vocabulary Rosa and Kassandra • Using funds • Applying for financial aid
    24. 24. Question & AnswerFor more information:• Julie Shields-Rutyna MEFA jshields-rutyna@mefa.org• Sherry Riva Compass Working Capital sherry@compassworkingcapital.org• Michelle Murphy FUEL m.murphy@fuelaccounts.org• Claire Dennison uAspire claired@uaspireusa.org

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