College Savings in the Des Moines Register

This weekend, I was fortunate to have a piece in the Des Moines Register on the need for policymakers to help familes save for higher education. In it, I argue that barriers to college savings need to be removed (in both financial aid and public assistance calculations), and savings need to be augmented for low-income families who have the toughest time putting money away for college. From the op-ed:

Even without barriers, can low-income families actually save for college? In short – yes, with some help.

A recent poll from Gallup and Sallie Mae sheds some light on the issue. It’s not surprising that only 32 percent of “low-income families” – those making under $35,000 are saving for a child’s college education. However, those low-income families that actually are saving do so in higher amounts and higher percentages than their high-income counterparts.

So, what does this mean? First, it is paramount to help more low-income students start saving on behalf of their future education and training. Second, when compelled to do so, working-class families are more responsible about saving for college than many middle- and upper-class families.

Some states are finding innovative ways to help these populations put away money. Maine (population: 1.3 million) recently set aside enough money to open a 529 college savings plan for every baby in the state, with $500 deposited upon sign-up. Illinois recently became the first state to offer a tax credit for employers to offer college savings plans to employees – who can then use them for children or their own retraining. A number of states also offer matching programs, similar to those seen in retirement plans, specifically to encourage low-income families to save for college.

For more information on improving college savings plans and the like, please visit www.collegesavingsinitiative.org.