THA’s Children’s Savings Account Program
The Urban Institute conducted an interim report on our CSA Program.
In the Fall of 2015, the Tacoma Housing Authority (THA), in partnership with Tacoma Public Schools (TPS), began offering children’s savings accounts (CSAs) for the children of New Salishan. The CSA program will help its children expect that they will attend college, be ready for college, be able to pay for it, and feel that they belong when they go.
New Salishan is THA’s largest and most diverse community. It is a HOPE VI mixed-income community of 1,350 renter and homeowner households on an award-winning neighborhood design. Lister Elementary School sits in the middle of Salishan; First Creek Middle School is next door.
THA’s CSA has two stages, an elementary school stage and a middle through high school stage. Both stages are linked to schools. The elementary school stage will encourage families to save for their children’s education. When a Salishan student enrolls in kindergarten, THA will open a savings account in his or her name. THA will remain the account custodian and will control withdrawals. THA will deposit $50 deposit into the account to get it started. THA will match the family’s deposit into the account up to $400 per year. This match will last through fifth grade.
As companion goals, the program seeks to improve the financial literacy of the students and parents. Lister Elementary School will teach a highly regarded financial literacy curriculum. Parents will also receive financial training. The program will also help parents into the mainstream banking system. Financial training of this sort is more effective when the children and the parents have real money to contemplate, as the CSA will give them.
The next stage takes the student from 6th grade through high school. It is for students who live in Salishan and who enroll in 6th grade at First Creek Middle School. These 6th graders and their counselors will devise individualized plans to take the students through high school. The plan will set milestones along the way, largely of an academic nature. Upon hitting a milestone, the program will make a deposit into the account, up to $700 per year.
Students who participate fully, with their families, from kindergarten through high school will accumulate a balance of $9,700. The balance will be available only if a student graduates from high school and enrolls in a qualified post-secondary educational program, and then only for the costs of attendance, including housing. Students who do not complete the journey will forsake THA’s contribution to the accounts. THA will use those unused amounts to fund future cohorts of students.
Research suggests that even modest balances in such accounts greatly increase the prospects that a student will attend college. In comparison with peers without accounts, they do better in school. They are more likely to expect to go to college. They are 3 times more likely to attend college. They are 4 times more likely to graduate. They score better on socio-emotional development indicators.
THA plans this effort in collaboration with Tacoma Public Schools (TPS), Prosperity Now, initial funding from the Bill & Melinda Gates Foundation, the Bamford Foundation, Heritage Bank, other funders and social service partners in Tacoma.
The Urban Institute as a third party evaluator will track medium and long-term metrics.
THA’s fund raising is well underway. Further funding will determine the scope and schedule for this initiative’s expansion.