Washington, DC — Today, New America’s Asset Building Program and the Center for Assets, Education and Inclusion (AEDI) at the University of Kansas jointly released a package of reports exploring the potential of college savings and Children’s Savings Accounts (CSAs) to promote greater opportunity and economic mobility through increased college attendance and completion. The package examines a pilot project, Promise Indiana, as a successful model for delivering CSAs using the current system of state 529 college savings plans.
“Savings gets more kids to, and through, college. Unlike tax credits or financial aid, savings can change the way kids think about themselves and the choices they make from very young ages,” said Justin King, policy director of the Asset Building Program at New America. “Right now, the only policy we have to help families save are 529s, which are highly regressive and serve only about 3 percent of American families. Promise Indiana offers such an exciting approach because it tries to take 529s and make them work well for kids that are left out of the current system.”
In 2013, a team led by the Wabash County YMCA launched the Wabash County Promise, which has since become Promise Indiana and spread to three additional communities. By facilitating account initiation, encouraging families to take concrete steps towards college preparation, and engaging community leaders as ‘champions’ of children’s aspirations, Promise Indiana increased 529 account ownership from 6% to more than 70% for Wabash County youth.
This year, Promise Indiana is expanding to four new communities. This expansion, and the onboarding of six additional communities in 2016-17, is made possible by a grant from Lilly Endowment, Inc. to support the scaling of the Promise model through operational resources.
“When we talk with practitioners and policymakers around the country about children’s savings and the potential for CSAs to improve the educational achievement and economic mobility prospects of disadvantaged young people, we often share what’s happening in Indiana,” said William Elliott, the primary author of the report and briefs, and the founding director of AEDI at the University of Kansas. “People are encouraged by Promise Indiana’s results, particularly the program’s success in engaging children, families, and community supporters in the work of college savings. We wrote this paper to share the value we see in Promise Indiana’s efforts, to more fully articulate the dimensions of a CSA that distinguish it from the 529 instrument itself, and to spark some reflection on questions of replication and scaling, at precisely the moment when the field faces this crossroads.”
The package includes a full-length report written and issued by AEDI, and two accompanying briefs, jointly released by AEDI and the Asset Building Program at New America.
The full report, “Transforming 529s into Children’s Savings Accounts: The Promise Indiana Model”, is available at: https://aedi.ku.edu/publication/report/transforming-529s-childrens-savings-accounts-csas-promise-indiana-model
The first brief, “From 529s to CSAs: A Progressive Vision for Asset-Based Educational Achievement” outlines a vision of an inclusive and progressive child savings system could promote opportunity and mobility. This brief is available at: http://www.newamerica.org/asset-building/from-529s-to-csas/
The second brief, “From 529s to CSAs: The Promise Indiana Model”, details the specific features of the Promise Indiana model. This brief is available at: http://www.newamerica.org/asset-building/from-529s-to-csas-2/