This past legislative session, our coalition worked to advances Children’s Savings Account legislation (HB3691) in Illinois. While the legislation passed out of both chambers, it is still waiting for a concurrence vote in the House after being amended in the Senate. Illinois families and communities are more than ready for this important program, so we are hopeful that it will pass when the legislature reconvenes at the end of June.
The legislation will help make college a reality for more Illinois students by expanding access to college savings accounts at birth. HB3691, sponsored by Representative Robyn Gabel and Senator Kimberly Lightford, is an expansion of the existing Illinois Bright Start College Saving Program. The key components of the legislation include:
- Automatic Account Opening: A 529 college savings account will be opened at birth for a child born in the state.
- Initial Seed: The account will be seeded with an initial $50.
- Match Incentive: Low- and moderate-income families will be encouraged to save through savings incentives – a one-to-one dollar match up to $75 per year.
- Universal: Once the General Assembly has appropriated sufficient funds and/or funds are raised through the private sector, this program will be implemented statewide for every child.
- Locally driven: In the absence of statewide funds, the program will be slowly phased in at the community level. Once the program is scaled statewide, this local engagement will be maintained.
A small amount of savings can make a difference in whether a child eventually ends up attending and graduating from college. Research indicates that children from low-income households with savings for college of just $1-499 are three times more likely to attend college and four times more likely to graduate than low-income children who do not have savings accounts for higher education. Having savings for college helps build children’s expectations and fosters a college-bound identity, in which children see themselves as someone who will go to college.
The money saved by families through the Children’s Savings Account (CSA) program could help address critical gaps that financial aid may not cover, such as books, transportation or living expenses. These relatively small costs can loom large for students from low-income families. Having savings to cover them can make a big difference in whether students are able to complete college.
The bill adopts policy recommendations from the bipartisan Illinois Children’s Savings Account Task Force. Similar to other CSA models around the country, the program will be funded through public/private partnerships. If passed and signed into law, Illinois will join a number of states that are leveraging their existing 529 College Savings Plans to help more families save for college.
A big thank you to all of our partners that helped advance CSA legislation this session, including COFI, POWER-PAC, EverThrive, the Ounce of Prevention, Woodstock Institute, Action for Illinois Children, and the Shriver Center.
Learn More About Our CSA Campaign & Join Our Efforts!