During last month’s meeting of the Financial Literacy and Education Commission (FLEC) meeting in Washington, D.C., I had the privilege of sharing our joint work with RAISE Texas to expand college savings in Texas. A commission Chaired by the Secretary of the Treasury, and made up the heads of 21 federal agencies, FLEC is tasked with developing a national financial education website (MyMoney.gov) and a national strategy on financial education. The topic of the Commission’s February meeting, encouraging youth savings through policy and practice, coincided with the release of important new guidance by federal financial regulatory agencies to encourage financial institutions to offer youth savings programs.
As coordinator of OpportunityTexas, CPPP’s joint initiative with RAISE Texas, I was invited to share our strategy to scale youth savings in Texas, and to demonstrate how it could serve as a model for other states. My presentation to the Commission members focused on our efforts to expand college savings in Texas by connecting students to college savings accounts through Texas new K-8 financial education curriculum.
In 2013, OpportunityTexas partnered with a few national organizations to conduct the first stage of research examining the impact of this approach in the Assessing Financial Capability Outcomes (AFCO) youth pilot. The promising findings from this pilot provided us with important new evidence for this approach and led us to set-up a second stage pilot to improve our model, which we plan to conduct during the 2015-16 school year. Once we refine our approach and are able to demonstrate its effectiveness, we plan to roll it out statewide by sharing a toolkit and providing technical assistance to schools and financial institutions to implement it.
As part of my presentation to the Commission, I also highlighted new legislation in Texas this session, HB 3987/SB 1858, that would help support our model. While many schools offer in-school savings programs, they generally do not offer them in conjunction with their curriculum. To encourage school participation, legislation is needed to allow schools to distribute savings accounts through Texas’ financial education curriculum. To encourage student participation, legislation is also needed to provide protections to the savings in these accounts, such as ensuring that account savings would not affect a student’s eligibility for Texas need-based financial aid.
I would like to thank the Commission for inviting CPPP to present our work, and for the opportunity to raise our visibility with federal agency leaders on the important work of expanding youth savings.
Watch full testimony here, starting at 1:30