We’ve recently joined with CFED, a national organization dedicated to expanding economic opportunity, and the Oklahoma Asset Building Coalition, in releasing the 2009-2010 Assets and Opportunity Scorecard. Our earlier post summarized the Oklahoma results, as did several media reports.

One area where Oklahoma needs to do better is our 529 college savings plan. Section 529 of the federal tax code allows families to set aside savings in a special account overseen by the state government. Interest earnings on the account are not subject to the federal or state income tax. CFED points out that: Read the rest of this entry »

It is widely known that minorities in the United States earn considerably less than Whites – according to the most recent Census Bureau data, the median income for a White household in 2008 was 34.5 percent greater than for a Black household and 28 percent higher than for a Hispanic household. Poverty rates for Blacks and Hispanics are also more than double than for Whites.

What is less frequently noted is that the racial wealth gap in America is even greater than the income gap. The 2009-10 Assets and Opportunity Scorecard that was recently released by CFED reports that for the nation as a whole,  the median White household possesses net worth (the sum of all assets less liabilities) six times greater than the median minority household: $122,505 compared to $20,132. In Oklahoma, the racial wealth gap was found to be even larger: the median white household enjoys net worth of $66,468 compared to just $6,620 for the median minority household, a gap of  10:1. Additionally, the report found that 37.2 percent of minority households nationally and 43.7 percent in Oklahoma live in “asset poverty”, meaning that they lacked sufficient net worth to subsist at the poverty level for three months in the absence of income. (By comparison, 16.4 percent of White households nationally and 15.9  in Oklahoma were determined to be “asset poor”). Read the rest of this entry »

Monday we participated, along with other members of the Oklahoma Asset Building Coalition, in the release of the 2009-10 Assets and Opportunity Scorecard, a major  report that looks at wealth, poverty, and the financial security of families in all 50 states.  The Scorecard provides data on how each state is doing on a cluster of measures in five issue areas: financial assets and income; businesses and job; housing and homeownership; health care, and education. The report also evaluates states on their success in adopting policies in each of these areas that strengthen asset development and financial security.  The Scorecard website is a treasure trove of data comparing all 50 states and offering detailed discussion of state policies; if you’re primarily interested in Oklahoma’s outcomes and policy rankings, click here. The Scorecard has also received a lot of press coverage, including articles in the Oklahoman and the Journal Record. Read the rest of this entry »

Last week I was fortunate enough to attend the first Conference on Children and Youth Savings sponsored by CFED, a national organization dedicated to expanding economic opportunity for all Americans. According to CFED,

People who own assets–such as a savings account–are more likely to have a more positive outlook and higher expectations for their futures and the futures of their children.

Children and youth savings accounts are created, mostly for low- and moderate-income children, at birth (or later in some programs) and initially funded with a small government contribution. As the child grows, additional contributions from family, friends, and, in some cases governments, help the account grow. Some programs limit use of the funds to education, while others offer broader opportunities or no limitations at all once the child reaches age 18. The theory behind children and youth savings accounts is:

• that low-income students (and their parents) will begin to see college as an achievable and affordable goal;
• that a savings habit learned in childhood is an asset for life;
• that youth savings will build assets for education, home ownership, and business start-ups; and
• that benefits of saving and investing by children help grow community and national economies.

CFED has been the main player in the SEED Initiative, a 10-year program to develop, test, inform, and promote children savings accounts. SEED incorporates 12 demonstration projects, including one in Oklahoma. The conference brought together a couple of hundred local service providers, funding agencies, government managers, and researchers in an effort to assess SEED and other efforts and to help figure out what comes next.

I got a decidedly mixed picture about children’s savings accounts from this experience. Here’s the good news: Read the rest of this entry »

Last week I was in Washington, D.C. attending a meeting of the SEED state policy partners. This is an initiative led by CFED, a national non-profit organization that is a pioneer in the field of asset development, that brings together Oklahoma and other states working on efforts to develop state-level approaches to promote children’s savings accounts (CSAs). CSAs are meant as ways to expand opportunities for children in low- and moderate-income families to save and build assets from an early age towards achieving the pillars of lifelong economic success – attending and completing college, owning a home, starting a business, or saving for retirement.

Our meeting featured a very interesting presentation from Kathie Little of the College Board, which has recently released a report recommending reforms in the system of federal student aid for higher education. For most American families, paying for college is a growing concern. According to the College Board’s annual Trends in College Pricing report, the average cost of a public 2-year college is over $14,000, while for a public in-state 4-year college, the total cost exceeds $18,000. Since 1979, the cost of a 4-year public college, including tuition, fees, and room and board, has almost tripled in inflation-adjusted terms, far exceeding the increase in average incomes. Students from all income groups have become increasingly reliant on financial aid to meet the costs of higher education, with federal student loans making up the largest share of this aid. In 2007-08, federal student loans amounted to $43.8 billion.

Read the rest of this entry »