Savings

Individual Development Accounts are designed to support savings for the purchase of specific assets, such as buying a home, pursuing post-secondary education, or capitalizing a small business, by matching the deposits of program participants. The concept of matched savings has been promoted as a means to broaden asset ownership among populations missed by current policy. Recently, a study was released evaluating the ten-year impacts of a specific Individual Development Accounts program in Tulsa, Oklahoma focused on increasing homeownership.

Increasingly, development practitioners and scholars are looking to youth savings accounts (YSAs) as a potential tool to spur  development and financial inclusion among low-income youth in developing countries. This has led many others to ask: What are youth savings accounts? Who offers them? What are their features and objectives, and how to do they vary? 

This FAQ is meant to provide a basic overview of a relatively new area of inquiry and practice by answering these and other questions surrounding the emerging field of youth savings.

Wednesday, the House Ways and Means Committee Subcommittee on Oversight held a hearing to root out waste, fraud, and abuse in refundable credits ostensibly in the spirit of closing the tax gap and reducing the deficit. In announcing the hearing, Chairman Boustany said,

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.

This presentation was made at the Stepping Stones Research Briefing, an event co-sponsored by the Washington Women's Area Foundation and the Urban Institute to elevate research with implications for increasing economic security and financial independence for low-income, women-headed families. Click here to view the presentation.

For many young people, college may seem like a desirable yet elusive goal: clearly understood as a step toward economic mobility but believed to be unaffordable and otherwise unattainable. Even young people who expect to go to college–those who are both certain and likely to attend college–do not actually attend after graduating from high school. This gap between expectations and attendance is what has been referred to as wilt–when young people’s developed expectations do not have the opportunity to blossom into college attendance.

William Elliott, PhD, Assistant Professor at the University of Kansas and a Senior Research Fellow here at New America Foundation, coined this term in a recent longitudinal study that examined college attendance for young people who expected to attend college.

Yesterday, the Senate Finance Committee held a hearing asking the question, "Is the Distribution of Tax Burdens and Tax Benefits Equitable?" To ask the question acknowledges tax policy's dirty secret: it isn't just for raising revenue, it's also for spending. Shh! This spending, know as tax expenditures, amount to about $1 trillion a year. To put this in perspective, this is more than Social Security, Medicare and Medicaid, or Defense.

Northeast Ohio needs new ways to help families -- especially the most vulnerable among us who have the least -- build assets so they can grow and protect their incomes.

Asset-building strategies can be simple: a program that guides tax filers to buy savings bonds with their refunds, another that enables a college education savings account to be created in a child's name when she enters kindergarten, or another that directs a portion of a struggling family's income from public assistance directly into an automatic savings account.

A new report examines the ways in which linking conditional cash transfer programs to savings accounts could accelerate economic inclusion and reduce poverty for millions of families.  Released by the New America Foundation, along with the Ford Foundation, the Citi Foundation, the United Nations Development Programme, and Proyecto Capital, the report summarizes key ideas and insights that emerged from a two-day expert global colloquium on the topic held last November at the Ford Foundation in New York City. 

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.