As a March report by the New America Foundation notes, more that 9 million Americans don't have bank accounts, and many are forced to pay steep fees for routine transactions, as a result. It's not just an absence of convenient neighborhood branches ...
The Wall Street Journal has a good, foundational piece up on the varying nature of state tax benefits in the various 529 programs offered by the states. Here's Annamaria Andriotis
This year the U.S. Department of Education's Gaining Awareness and Readiness for Undergraduate Programs, commonly known by the acronym GEAR UP, encouraged grantees to include children's savings programs in their applications. The Department of Education's decision to make children's savings programs a funding priority is based on research that tests the relationship between children's savings and their educational outcomes. This research, much of which is published by William Elliott (Assistant Professor at the University of Kansas and Senior Research Fellow here at NAF) and is publically available on the Center for Social Development's website under asset building, consistently finds significant, positive relationships between children's savings accounts and their educational outcomes including academic achievement, high school graduation, and college attendance and completion.
Last week, NPR treated listeners to an interesting broadcast that touted preschool as potentially the best job-training program. This isn't really news to our friends in the Early Educational Initiative, who have been advocates for early childhood education for some time.
We know it is happening: the cost of college is going up. A few years ago the NY Times published an article based on a report by the National Center for Public Policy and Higher Education reminding us that college may soon become unaffordable for most in the U.S. This reminder was accompanied by the facts that there was a 439% increase in college tuition between 1982 and 2007 and a 147% increase in median household income during that same time period.
“Surely,” we think to ourselves, “the cost of college cannot continue at this rate. Don’t we believe in things like the laws of physics, which tell us that what goes up, must come down?” Unfortunately, the laws of physics are not applicable here. Inflation is likely to continue, meaning that the cost of college may continue to rise.
Following in the footsteps of Maine, Rhode Island, San Francisco, and others, North Dakota launched a new initiative Wednesday -- what's being called the Children FIRST program -- that provides college savings accounts at birth. Every newborn in the state will now be eligible for a $100 grant, and as is the case with Maine's Harold Alfond Challenge, the child must be signed up before his or her first birthday.
Unlike Maine's program (which offers $500 at birth) however, North Dakota requires that the initial $100 be matched within four years by the family or another private source. The Bank of North Dakota, which is the only state-owned bank in the U.S., will oversee the program and finance the grants.
To note: North Dakota is also one of ten states whose 529 college savings plan currently provides matching grants to low- and moderate-income families.
This was presented at a webinar co-hosted by CFED, New America, the U.S. Department of Education, and the National Council for Community and Education Partnerships. To view this presentation, click on "Related Files" to the right of this page or click here.
This year, the federal GEAR UP program -- a $300 million grant program designed to increase the number of low-income students who are prepared to enter and succeed in postsecondary education -- is encouraging applicants to include strategies in their proposals that focus on financial literacy and educational savings. As such, CFED and New America will be hosting a webinar on Wednesday, May 18th to discuss the link between savings and educational outcomes, as well as policies and partnerships that encourage children's savings and financial education. The webinar itself is meant to discuss the rationale behind these efforts, guide GEAR UP grantees through the process, and possibly make connections between between the asset building and education fields to create and enhance college savings and financial education efforts.
Participants will include myself, Leigh Tivol (Director of Savings and Financial Security at CFED), Phil Martin (Assistant for Financial Education and Student Aid at the U.S. Department of Education) and GEAR UP Program officers that will discuss the nuts and bolts of the grant application and approval process.
This is one piece of the partnership between the Department of Education, the FDIC, and the NCUA promoting savings for education, and follows on the heels of Secretary Arne Duncan talking about the importance of savings and financial education. Watch for yourself:
You can register for the webinar by clicking this link
We've been fairly heavily promoting the recent announcement of a partnership between the U.S. Department of Education, the FDIC, and the National Credit Union Administration to promote savings and financial literacy for low-income students, in the context of increasing college access and success. But folks in the asset building arena interested in such efforts may be wondering, in no particular order: Who, What, When, Where, and How? (For the “Why” I recommend Secretary Arne Duncan’s video here).
Luckily, the Department of Education has baked this into the application process for this year’s federal GEAR UP grants. GEAR UP provides six- and seven-year grants to both states and community-based organizations to prepare low-income students for higher education. This year in particular, they are promoting the link between asset building, financial literacy and college readiness – which strikes us as a perfect opportunity for the asset building field to create and expand upon efforts to launch child savings accounts and other financial empowerment endeavors, particularly at a time when money for such efforts, however cost effective, is often difficult to come by.
In December we noted that the leaders of the Education Department, FDIC, and the National Credit Union Administration signed on for a partnership to "encourage schools, financial institutions, federal grantees and other stakeholders to work together to increase financial literacy, access to federally-insured deposit accounts and savings among students and families across the country."
That sounds great, but how many of these things have we seen come and go with nary a whiff of activity? Well the partners here seem determined to prove that this one will be different.
Arne Duncan is out with a new video pushing educational institutions, banks and credit unions to get into the game of promoting financial access, education and savings for elementary and secondary students across the country. He specifically cites two projects that we've long been advocates for, Bank On and San Francisco's Kindergarten-to-College initiative, as examples of home grown, local partnerships that can improve the financial futures of children and their families.
While the Administration didn't promote savings proposals in their budget as much as we'd hoped, it's encouraging to see that a recognition of the power of savings is still present and worth the time of senior administration officials. Here's Secretary Duncan:
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Following in the footsteps of Maine, Rhode Island, San Francisco, and others, North Dakota 
