New America Foundation
By: Mark Huelsman
December 2, 2010
One advantage of the asset-building field has always been its ability to link often-disconnected priorities like homeownership, entrepreneurship, retirement, and education into a cohesive set of policies to spur economic mobility.
So it brings great encouragement to point out that a few seemingly unrelated federal agencies are following the lead in promoting savings and financial education efforts, specifically to advance higher education goals for low-income students.
Recently, the U.S. Department of Education joined with the FDIC and National Credit Union Administration (NCUA) to announce a new inter-agency partnership "to encourage schools, financial institutions, federal grantees and other stakeholders to work together to increase financial literacy, access to federally-insured deposit accounts and savings among students and families across the country."
From Education Secretary Arne Duncan:
"A lack of financial literacy is a major roadblock on the path to college access and success for too many students and families.We know that students who save for college are more likely to go. Teaching students how to make smart decisions about money from an early age--and giving them and their parents the right tools and incentives to save toward financial goals, including higher education--will help them build strong financial futures and will help us reach the President's 2020 college completion goal. I applaud the cities, schools and financial institutions that are already working together on this, and I encourage others to take on this challenge."
The Secretary also cited work by the Center for Social Development, New America's partner on the College Savings Initiative, linking savings to college attendence.
Specifically, the NCUA plans to fund partnerships between credit unions and schools over the next five years; the FDIC will encourage financial institutions to develop similar partnerships; and at the Department of Education has announced encouraging savings as a priority in the 2011 GEAR UP competition.
Efforts like these can only fully succeed with concrete policies behind them, of course. The Education Department has taken a shine to San Francisco's Kindergarten-to-College Initiative (discussed on this blog in "suggested reading" below), which hopefully will spur other municipalities and states to undertake other efforts to universally provide savings accounts for students.
While many of these efforts can be extremely cost-efficient, state and city fiscal situations remain dire and new initiatives, however economical, might need a kick-start of federal grant money -- something the College Savings Initiative has advocated as a solution for some time now.