New Paper on New England CSA Policy

Wednesday, June 10, 2015

We have learned so much, from and alongside our colleagues in New England, as they have boldly and wisely pursued Children's Savings Account innovations, designed for their particular contexts, but reflecting a growing regional consensus about the potential utility of these asset interventions. We are honored to have been allowed to delve into the origins, features, intended purposes, and proposed metrics of these CSA efforts. We hope that the presentation of this policy overview, as well as our consideration of the possible national implications of New England's momentum, might contribute positively to the effort to secure the vision of an account for every child.

Here, we share a few highlights from the report. We welcome comments, questions, and discussion, and would also be delighted to connect those considering CSA policies such as those in New England to some of the visionaries charting that territory in that part of the country.

  • All of the New England programs--proposed and enacted--are organized around birth, instead of kindergarten, as the defining moment for CSA eligibility. This suggests a significant role for accounts at birth, even while school-based CSAs might offer other, distinct advantages.
  • State-based CSAs in New England are built on the 529 platform, even while many of these programs encounter some challenges in working within the 529 system. These areas may be key players, then, in prompting reforms to the 529 to optimally position it as a CSA delivery mechanism.
  • New England is leading the way in innovating the delivery of initial, 'seed' deposits. Maine has the largest in the country, at $500 per child, and Rhode Island's 'checkbox' option has managed to deliver $100 to a growing percentage of even economically-vulnerable children, at birth, without utilizing opt-out enrollment. Since these are important incentives for both account ownership and asset accumulation functions in CSAs, New England's lessons may prove decisive in future policy development.
  • Despite noteworthy success and considerably optimistic future prospects, these states' CSA efforts are not without challenges--fiscal, political, and operational. The CSA field has a role to play in helping New England overcome these obstacles, as well as lessons to learn from their experiences.
  • The origins of each CSA speak to significant contributions by philanthropy, elected officials, grassroots leaders, and policy bureaucrats. Entities have many different reasons for supporting CSAs--and many ways to advance these transformative interventions. The New England CSA story suggests that there are many possible paths, then, to establishment, and many ways that CSAs can flourish even in the absence of national investment.

There are other findings in the report, including discussion of the potential for each New England state to contribute to a collective CSA research agenda. And this is obviously a story still being written; even during the drafting of the paper, Vermont's CSA legislation passed, Rhode Island's uptake increased, and policy advanced in New Hampshire. We look forward to continued conversation with our colleagues in the region, and to seeing what's next for this important hotbed of CSA development!

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