Spotlight Exclusives

Creating a Pathway to College for all Kids in Illinois

Jody Blaylock, Heartland Alliance Jody Blaylock, Heartland Alliance, posted on

There is widespread agreement that quality jobs can provide a pathway out of poverty and the opportunity for families to thrive. However, more and more of these jobs in the United States require a college degree and access to the education needed to attain them is not equal. In 2011, just 20 percent of African Americans and 13 percent of Latinos completed a four-year college compared with 34 percent of whites nationally.

There are many reasons for this. The cost of higher education has exploded in recent years, with the average annual tuition rising by 35 percent since the 2008 school year. What’s more, while aspirations for the future are high when a child is born, these high expectations can decrease over time as families encounter financial challenges. Many children, particularly in low-income families and households of color, simply don’t expect that they will go to college at all.

But there is a way to change this, and that is by giving every child in Illinois better access to opportunity the moment they’re born.

Heartland Alliance’s recent report, Building Brighter Futures: Children’s Savings Accounts in Illinois, makes the case that universal Children’s Savings Accounts (CSAs) – recently adopted in a handful of states including Connecticut and Rhode Island – can help Illinois children and families build a pathway to college.

A college savings account opened at birth provides a way for children and families to actively plan for the future. Research has shown that children who have a college savings account are more likely to expect that they will go to college, as a savings account helps them create a “college-bound” mentality. CSAs put children on a path to success: children with $500 in college savings are three times more likely to enroll in college and four times more likely to graduate, meaning that their chances of obtaining a quality education and then going on to get quality jobs is greatly improved.

What’s more, a universal Children’s Savings Account program in Illinois could reduce the racial wealth gap – the gap in assets between white households and households of color – by as much as one-third. This disparity, and others, are a result of historical and current policies and institutional practices that disproportionately harm communities of color while providing benefits to white communities. CSAs teaches children lessons about savings that last into adulthood and expand access to educational opportunities that drive higher earning potential.

Right now, 48 states and the District of Columbia operate a 529 college savings plan—an investment account that can be used to save for postsecondary education. 529 plans can be a foundation for a Universal CSA program. We took a look at Illinois’ 529 plan, Bright Start, to see who is using it to save for college.

The results are striking, but not surprising. Like other investment accounts, people saving with Bright Start are more white, educated, male, suburban, middle-aged and earn higher incomes than the average Illinoisan. White people make up 88 percent of Bright Start savers, while African Americans and Latinos only make up about 2 percent each.

Illinois has a long way to go to help all families save for college.

It is time for Illinois to build upon the Bright Start program to create a Children’s Savings Account program, where a 529 account is opened for every child born in Illinois. We led efforts to introduce legislation in Illinois this year that would create the structure for such a program. The accounts would be jumpstarted with an initial deposit, and a matched savings incentive would be provided to help low-income families save.

Illinois policymakers looking for a way to strengthen the workforce, improve quality of life in their community, and help kids go to college should look no further—a universal, community-driven Children’s Savings Account program is an investment with huge returns.

A savings account for every Illinois child would signal to children that their community believes in them, believes that they can save, and believes they can go to college and pursue their dreams.

Jody Blaylock is a senior policy associate for financial empowerment policy at Heartland Alliance.

« Back to Spotlight Exclusives