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Similar to CSAs – Join the Campaign to Create a State Mechanism for Children’s Savings Accounts!
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CSAs – Join the Campaign to Create a State Mechanism for Children’s Savings Accounts!
- 1. Children’s Savings Accounts Join the Campaign! RE:Conference, Salem OR October 29, 2015 Jill Winsor Nancy Yuill Elena Fracchia Oregon Asset Building Coalition
- 2. Oregon Asset Building Coalition Mission Values Goal
- 3. What are Children’s Savings Accounts? • Long term asset-building accounts • Established for children as early as birth & allowed to grow over their lifetime.
- 4. Why Are CSAs Exciting?
- 5. Children’s Savings Policy Overview • 2004-2009: SEED Initiative drove CSA advocacy • Incremental wins, but no breakthroughs State Policy Win AR Authorized & funded pilot project with commitment to expand TX Authorized (but didn’t fund) matched prepaid tuition program KY, OK, HI, IL Enacted Study Commissions OK, TX, CA, ND, HI “Planted a flag” by introducing legislation • Challenges Advocates needed to explain, show effectiveness AND build political support Coincided with recession: no interest in programs that cost money
- 6. 1 12 36 0 5 10 15 20 25 30 35 40 State Adoption of Children’s Saving Policy 36Universally Available Incentive Targeted Incentive for LMI Families Incentive to Noncustodial Parents Current Policy Landscape On policy agendas in more than 20 states
- 7. Universal Match 3states Current Policy Landscape Of the 36 states with universally available incentives for college savings … Tax Credit 3states Tax Deduction29states
- 8. Road to CSAs in 2017 Fall 2015: • Current & new partners have begun to engage with campaign. • Coalition begins to outline campaign strategy & develop a plan for interim. Spring 2016: • CSA design work is under way. • Legislators identify as CSA champions & ready to move CSAs forward during 2017 Session. By Summer 2016: • Coalition engages other allies and philanthropic orgs. • Legislative ask is defined & drafted. By Fall 2016: • CSA campaign has broad participation form wide range of sectors. • Coalition leadership has shared understanding of strategy, tactics, timeline & roles. • Bill is introduced by committee.
- 9. Beginning of legislative session 2017: • CSA advocates have unified voice & increased capacity to advocate within the legislature. • Philanthropic groups are ready with a commitment to match State investment in CSAs. During legislative session, 2017: • Energy & excitement builds amongst CSA advocates who take action to advocate for CSAs. • Legislative champions are ready to move bill forward. • Broad set of legislators understand & support CSAs, believe in the potential and promise of CSAs. End of legislative session 2017: • Political will exists to move CSAs forward in a statewide, bipartisan manner. • State Treasurer’s office implements CSAs. Final Goals • By 2019, Oregon has a state platform for Children’s Savings Accounts, with a base level deposit made in each account. • The state program is enhanced by the participation of several state and regional foundations.
- 10. Join Us! Using the Oregon AB Coalition Values as our touchstone, we want your thoughts on some key questions…. • What should be the program goals? • Who should we serve? • When and how should they sign up? • What’s important in account design? • What do they get? We want your help on our team!
- 11. Examples of Program Goals • Increasing college savings & affordability • Fostering a college-bound identity in children & promoting educational achievement • Increasing college attendance & completion • Increasing child & family financial capability and savings habits • Building lifelong assets • Other goals?
- 12. Who will be served? Who is the target population? • Participant’s age at enrollment • Eligibility criteria -- universal, or limited? • Program reach (i.e., geographic area or institution to target) • Other targeting criteria? How should participants enroll? • Through which system? Schools? At birth? • Will participants be automatically enrolled (opt out) or will they self-enroll (opt in)?
- 13. How important are these elements of account design? • No need for Social Security Number • Flexible options for making deposits • Physical branch locations • Easy access to account balances • Low fees and costs • Balances not counted towards asset limits • Other considerations for the account
- 14. What will they get? Should there be incentives? • Larger initial deposit for families of low income? • Matched savings for families of LI to incentivize more deposits over time?
- 15. Debrief
- 16. Design team, decision making and advocacy • Who is interested in helping design the program? • Who can ask their organization to become a member of the coalition? • Who else needs to be at the table to help us achieve CSAs in 2017?
- 17. Next Steps Sign Up! Jill Winsor 503.226.3001x118 jwinsor@neighborhoodpartnerships.org
Editor's Notes
- Vision & Mission, Values will be posted on Flip chart paper around the room, JW will reference these. Goal = CSAs in 2017
- Improved maternal mental health. Mothers of young children with CSAs demonstrated fewer depressive symptoms than a randomized control group without CSAs in a study in Oklahoma. Mothers in the study whose children had a CSA also felt more positively about the future. Mothers in Oklahoma’s CSA program report reduced negative attitudes about financial institutions, increased knowledge of financial products and services, and increased motivation to save Improved social-emotional development. In Oklahoma’s experiment, young children with a CSA had significantly higher social-emotional development at age 4 than children in a randomized control group who did not have a CSA. The effects were greater for children in low- income homes. As noted by Oregon’s Early Learning System, social-emotional development is an important predictor of school success. Increased expectations. Children with college savings and their parents have increased expectations that they will go to college, which can increase their engagement in primary and secondary school.11 Research suggests that children in households with savings may have increased reading and math scores. Jump-starting savings. While parents understand the importance of post-secondary education, and many plan to use savings to support their children, most have not yet started to save. Automatic enrollment in CSAs provide an opportunity for families to jump-start savings. College saver identity. Researchers believe that CSAs are successful because they promote a “college saver identity”: When children have college savings, it plants and nurtures the expectation that they will go to college and have the means to get there, facilitating college readiness and a future orientation from a young age. Increased high school graduation rates. Children in households with savings may have higher GPAs and higher high school graduation rates. Increased enrollment in and graduation from two- and four-year colleges. Children from families with low and moderate incomes who have up to $500 in college savings are three times more likely to attend and four times more likely to graduate from a two- or four-year college than children with no savings account. Given that nearly half (45%) of Oregon children come from families with lower incomes (below 200% of the federal poverty threshold, or $50,000 a year for a family of four), the potential impact of CSAs on families with low incomes is substantial. Continued savings. Research indicates that children with savings accounts are two times more likely to own savings accounts as young adults than children without savings accounts. Nationally, only 39% of children from families with low- and moderate-incomes have savings accounts, whereas 74% of children from families with high incomes have savings accounts. Less college debt. College graduates with less debt have higher net worth, more home equity, and more retirement savings. Access to capital. When CSAs are allowed to be used for other asset-building purposes, children who decide not to go to college are able to access seed money to support investments in their own entrepreneurship, first home, or retirement security. These asset-building purposes and income- generating opportunities are crucial to long-term financial well-being.
- Children’s Savings Accounts have been implemented and tested in many communities. These next slides from our national partner organization CFED show the foundation that we are building on here in Oregon. The 1st big demonstration of CSAs was the SEED Initiative. The Savings for Education, Entrepreneurship and Downpayment (SEED) Policy and Practice Initiative was a 10-year national policy, practice and research endeavor whose goal was to find out what would happen if children from families with low incomes received savings account “seeded” with modest financial incentives and paired with age-appropriate financial education. Could these small accounts result in significant, life-changing outcomes for children and youth? To find out, the SEED Initiative developed, tested, and implemented matched savings accounts and financial education for more than 1,300 children and youth with low family incomes across the country. SEED generated a substantial body of learning, research and lessons from practical experience that are already playing an invaluable role in efforts to expand savings and asset-building opportunities to millions more children nationwide. During the time of the SEED Initiative, a number of states worked ot enact policy to support CSAs – you can see them listed here. There was no comprehensive statewide CSA program enacted at the legislative level. The momentum had not been built, and during the recession it was hard to invest proactively.
- Children’s Savings is very much on the policy landscape today. 36 state legislatures have some universally available incentive, such as the income tax reduction that Oregon offers for deposits to a 529 account. 12 states offer a means tested incentive, and 1 offers an incentive to non custodial parents.
- The state incentives vary – Oregon offers a tax deduction for deposits to a 529 account. Three states offer a match to all children, such as North Dakota’s $500 per year match.
- You are our first focus group of practitioners and interested parties. This is early days, nothing is or will yet be etched in stone, but we want your valuable input to help us get started in working through these design elements. If this is the kind of work you love to do, and you have time, let Jill know that you would be interested in joining the design team.
- Reflect on your mission. Visualize your favorite client. With them “sitting beside you”, What is the most important goal for the people you serve? What is the most important goal for Oregon’s future? For each of you, choose your 1st, 2nd and 3rd choice of most important goal as individuals, then see if your group can come to consensus on the group’s 1st, 2nd and 3rd choice of the most important goal.
- Review the values of the Oregon Asset Building Coalition listed on the wall. With that as your touchstone, along with your own focus on who you serve, come up with some ideas about the target population and how they should get enrolled. Note: program reach means focusing in a geographic area, such as rural or southern. Institution can mean head start kids or free and reduced lunch kids. A few things to think about: If the goal is to maximize savings, you want to start as early as you can, like at birth. Conversely, which system will be the most effective in capturing the targeted populations we most want to serve? Maybe that’s the school system. One enrollment system, as simple as possible. And remember the status quo bias, ie. inertia, its hard to opt in and enroll myself in something, its easier to stay in something if I was automatically enrolled in it, and I am unlikely to opt out, ie unenroll.
- Think about your clients and or the target population you prioritized. How do they bank? What would make this easy, welcoming and accessible for them? Rate each element of account design on a scale of 1 to 5 with 5 being extremely important and 1 being not important at all. If you have other account considerations, please make note of what they are so we can follow up.
- (Only do this one if time allows.) The notion is to seed the account with a small start up deposit, like $25 or $50. So these questions get at ways of targeting specific groups for more help and incentivizing savings behaviors. You can answer simply yes or no, or depends! And remember, the simpler this is the easier/more affordable it will be to administer, therefore easier to make the legislative ask.
- Elena collects groups input
- There are many ways to get involved, and you may not able to commit to a role today, but take Jill’s contact info and stay in touch to see how you can get plugged in as a coalition member, as a designer or as a supporter and advocate.