Fulfilling the Promise of Child Savings Accounts

Idea

Economic inequality and the unequal distribution of opportunity have long been concerns for scholars at New America. As early as 2003, New America’s Ray Boshara articulated a vision to combat these social ills by designing a federal, legislative plan for universal children’s savings accounts, or CSAs.

Incubation

Built on pioneering scholarship from the world of academia, New America’s plan for universal CSAs was designed to boost opportunity by democratizing the ownership of capital and empowering rising generations of Americans to make productive investments in their future. This legislative ambition was first introduced in 2004 as a piece of bipartisan legislation called the ASPIRE Act. The proposal called for opening an account for each child born in the United States, and for each account to be seeded with a $500 deposit, allowed to grow tax-free. Contributions to the account were to be encouraged by the prospect of tax-free growth and matching contributions for children from families with lower incomes and fewer resources, and the accumulated funds in the accounts were dedicated for key life events related to maximizing opportunity—things like education after high school, homeownership, and retirement.

Impact

In the 15 years since its introduction, the ASPIRE Act has continued to inspire new iterations of the same idea and has also helped to spark a movement that is making CSAs a reality—more than 50 CSA programs are now running nationally, serving nearly 400,000 children in more than 30 states.