Archive for the ‘asset building’ Category

Evaluation of CS4C Program Leads to Policy Changes

January 23, 2014asset building, child_support

139661970smCFRP’s evaluation of the Child Support for College (CS4C) program has helped spur a rule change at the Texas State Securities Board that will help Texas families receive professional assistance when signing up for college savings programs.

One of the barriers encountered by CS4C, an 18-month pilot program designed to incentivize college savings among those in the Texas child support population, was a set of legal restrictions around the type of assistance financial coaches could provide to clients interested in college savings accounts. Regulations enacted by the Texas Securities Act prohibited financial coaches from providing guidance or financial advice to clients unless coaches were officially registered with the State Securities Board –a lengthy process involving extensive background investigations, tests on securities law and principles, compliance with record-keeping and disclosure requirements, and annual renewal.

Because many financial coaches working with disadvantaged populations are employed through community organizations, few are registered as official dealers, agents, or investment advisers. Under the old rule, these coaches were severely restricted in their ability to help clients navigate the complex menu of investment options, leading some clients to forgo college savings accounts altogether.

Recognizing this as a substantial barrier to saving for college, RAISE Texas, one of the primary stakeholders in the CS4C program, began to work with the Texas State Securities Board to draft a new rule allowing financial coaches to assist families and individuals in completing applications for approved college savings programs, such as the Texas 529 plan. In addition, the proposed rule would permit financial coaches to actively provide information on these savings programs to clients. On January 14, 2014 the Texas State Securities Board approved and passed these changes in rule 139.24.

In practice, the rule change provides a registration exemption for charitable organizations and their financial coaches when assisting economically disadvantaged clients with Texas qualified tuition program plans. The new rule represents an important step forward in efforts to facilitate college savings among disadvantaged populations in Texas, and would not have been possible without the commitment of CS4C stakeholders and advocates.

Click for more information about the CS4C program evaluation and the full evaluation report.

–by Daniel Dillon, Research Associate

Two “Child Support for College” Initiative Asset-Building Events

October 22, 2013asset building, child_support

99680076mod2Over the next few weeks, CFRP is presenting preliminary findings from the program evaluation of an innovative asset-building program in the state of Texas, the Child Support for College (CS4C) initiative. The pilot year of the CS4C program just wrapped up, and now there are two opportunities to learn about the program and lessons learned from the evaluation, as well participate in the larger asset-building discussion.

Dr. Cynthia Osborne, with staff researchers Laura Bellows and Daniel Dillon, is presenting at a special forum on October 25, 2013 at the LBJ School of Public Affairs at the University of Texas at Austin.  The forum, Seeding the College Dream: Results from the Child Support for College Asset-Building Initiative, will include an informative overview of CS4C, initial findings and conclusions, and a discussion of a panel of experts.  Click for more info about the forum.

Dr. Osborne is also participating in an upcoming webinar, Supporting Children’s Futures: Turning Child Support into College Saving, hosted by the national asset-building organization, CFED, on November 12, 2013.  Dr. Osborne will be sharing the results of the evaluation of CS4C and how lessons learned in Texas could be applied to efforts in other states.  Click here to register for the free webinar.

CFRP’s full evaluation report will be available in December 2013.

Child Support for College (CS4C) is a unique pilot program administered by RAISE Texas that works with the families who are a part of the 1.4 million case Texas child support system.  Many of these families have low levels of income and wealth and therefore have difficulties saving for their child’s education. For some of these families, child support contributions from the noncustodial to the custodial parent may provide the necessary infusion of resources to seed and support college savings. CS4C addresses this opportunity by promoting parent savings for their child(ren)’s future college education and providing access to financial coaches.

 

College Enrollment and Grad Rates Increase With Even $1 in a College Savings Account

April 29, 2013asset building, child_support

153495691_smA study from the University of Kansas, Elliot (2013), finds that having even as little $1 in college savings makes a child three times more likely to enroll in college than a child with no savings account. Also, students with designated college savings accounts between $1 and $499 are over four and half times more likely to graduate from college than students with no savings. Dr. Elliott elaborates in his recent article, “Are All Types of College Financial Aid Created Equal?

Much of the research is this area suggests that developing programs to incentivize college savings among traditionally disadvantaged groups may translate into substantial future benefits for those students and their families. CFRP is currently evaluating one such program recently launched in Texas to assess the impacts of incentivizing college savings among the child support population. Known as Child Support for College (CS4C), this pilot program seeks to leverage transfers within the child support program for the purpose of encouraging college savings.

Preliminary results from the CS4C program suggest that even a relatively small amount of savings may have a large psychological impact on parents’ dream of sending their children to college. Participating parents tend to note the importance of talking with their children about the savings accounts, how the act of saving for their children’s education makes them feel proud, and how the program has helped them to give their children an opportunity they did not have. CFRP’s extensive evaluation of the CS4C program is due out later this year.

–by Daniel Dillon, Research Associate