When I was young, I wanted to be a nurse just like my Mum. If that didn’t work out, I wanted to be a superhero vet that saved every cat in the world. I knew that to do either of those things, I would need to go to college. I also knew that I was lucky enough to have a college savings account supporting those dreams.
According to Creating a Financial Stake in College, a series of reports by Dr. William Elliott III, college-bound identity begins as early as the fifth grade. However, every 22 seconds a child in the U.S. falls out of the college pipeline – giving up their dreams of becoming an engineer, teacher, or a superhero vet.
A college savings account in a child’s name could be a huge motivator. Children that know someone is saving for their future are six times more likely to go to college, regardless of their parent’s income, race, or educational attainment.
Last week, the U.S. Department of Education announced they will invest 8.7 million dollars in a children’s savings account demonstration project through the Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP). The funds will be awarded to GEAR UP partners in a number of states. The goal is to offer 10,000 students a savings account. The students will be automatically enrolled in the accounts, with a $200 initial federal deposit. The students will also have access to a match of up to $10 every month.
Illinois is one of twenty-some states that have a GEAR UP program and may be eligible to receive a grant. Chicago GEAR UP works in schools across the city to help students, and parents, prepare for college, both academically and financially.
In addition to this movement at the federal level, IABG continues to work to make universal children’s savings accounts (CSAs) a reality in Illinois. Since the release of recommendations from the Illinois Children’s Savings Account Task Force, we have developed a plan for what a successful, universal, CSA program could look like in the state. Meanwhile, our coalition is working with our partners to increase access to and strengthen the state’s current 529 program with the hope of introducing state legislation next year.
As tuition increases and enrollment and completion rates among low-income students decreases, now is the time to innovatively address the achievement gap. We need to change our children’s expectations about their future. They should have a reason to hope for their own future – to know that being a superhero vet or a nurse is an attainable dream. Universal Children’s Savings Accounts in Illinois can give that hope to kids across the state.
The Department of Education is sill finalizing the guidelines for the GEAR UP demonstration project. IABG will be responding to their request for public comments on their proposed demonstration. We welcome your feedback as we finalize our comments.