Children’s Savings Account Program

Program Description:

Provide seed capital funding to develop a Children’s Savings Account Program. The Program would seek to create Sec. 529 savings accounts for 1,000 children per year, and seed each account with $500.

Program Recommendations

The study team recommends immediately establishing a Miami-Dade Children’s Savings Account Program to aggressively improve educational attainment and performance rates in th e County, as well as build the educational and skills base of Miami-Dade’s labor force. Recommendations for implementation of CSA programs in Miami-Dade are as follows.

! Augment Florida’s 529 programs: Florida offers both a 529 prepaid program and a 529 savings plan. The Florida Prepaid College Plan is the largest prepaid plan in the nation, and offers unique additional benefits including a dormitory option. The State’s programs provide an established and popular savings account platform with established administrative infrastructure;

! Structure Extended Income Eligibility for CSA Programs: College affordability is an issue for low, moderate, and middle income families. Income qualifications should recognize the value of increasing educational attainment, and extend income qualifications up to and/or above the area median household income;

! Structure Immediate Tax Benefit Incentives for Match Donors: Building a privately funded matching pool will be crucial to the near and long term success of any CSA program;

! Address the Special Needs of Miami-Dade’s Residents: Promoting participation in education savings requires additional effort to ease entry into the program. Residents needing assistance to enter the program may have language barriers, no seed money, and no existing relationships with banks or financial institutions;

! Require Financial Literacy and Educational Goals as a Condition of Grant Funding: Tie savings match funding to clearly stated educational milestones (GPA, PSAT, SAT test taking, etc.), and family participation in financial literacy programs; and

! Provide Automatic CSA Enrollment: Provide a 529 account and seed funding for every child of born into every income qualifying family in the County.

Program Cost Estimate:

! Full account seed funding for two years is $1 Million. Additional deposit match monies would need to be raised.

Recommended program seed funding:

! $550,000 to cover the first year’s account seed funding, plus administrative costs.

Households directly impacted during pilot program:

! 2,000 households