Child Savings Accounts Coalition Forms

One of the central planks of our work here is the ASPIRE Act, a bill that would create a universal, progressive system of “Lifetime Savings Accounts” for all children, at-birth. Each account, which would grow tax-free, could eventually be used to pay for post-secondary education, to buy a home, or to help provide for a secure retirement. Each account would be created with a one-time $500 contribution at birth. Children living in households with incomes below the national median would be eligible for a supplemental contribution of up to $500 as well as the opportunity to earn up to $500 per year in matching funds for amounts saved in the account.

Asset ownership can improve economic mobility, provide greater financial security, and improve the likelihood of children attending and completing college. ASPIRE would also create an unprecedented platform for financial education and improved financial literacy.

Needless to say, we’re big fans of this idea. And we feel fortunate to have good company on this front.

Our good friends at CFED (along with the Aspen Institute and UNCF) have just announced the creation of the Child Savings Account Coalition (www.childsavingscoalition.org), a group of organizations working toward “progressive, universal savings accounts for every child at birth with the goal of alleviating poverty, promoting sound financial awareness and social behavior and inspiring a sense of hope and opportunity for every child.”

The Coalition is comprised of members who have endorsed a statement of principles supporting a vision of child savings accounts. This is an exciting opportunity for organizations to show their support of child savings accounts and the benefits of increased asset ownership for all children in the United States.

Here are some “key facts” as cited by the Coalition:

• Asset building provides opportunity for economic mobility. In research with national data sets, parental wealth is positively associated with children’s math and reading scores, positive social behavior, college enrollment and college graduation.
• Savings increase expectations for the future. Interviews with children indicate that they begin to formulate ideas about their futures as early as elementary school.
• Low-income families can and do save. Research from the SEED Policy and Practice Initiative found that despite significant economic and social barriers, even very low-income families found ways to save for their children’s futures.
• Bipartisan support exists for Child Savings Accounts. In a 2007 national poll, 69 percent of respondents and 78 percent of parents supported the idea of savings accounts for newborns – regardless of geographic area or political affiliation.
• Support for Child Savings Accounts is growing. Currently, CSAs exist in at least four other countries: the United Kingdom, Mexico, Korea and Singapore. In Maine, children receive a 529 college account at birth, with an initial deposit of $500. Twelve states provide matching funds for low- and moderate-income family contributions to 529s.

Sonya Clay at CFED is organizing the Coalition, and she can be reached at sclay@cfed.org or 202-207-0127. Of course, you can feel free to contact us as well.