Whether we look at the impacts of predatory lending, fees and fines, segregation in housing, lack of access to quality jobs, or declines in mortgage and small business lending, the persistent outcome we find is that inequities in income, debt, assets, and opportunity are increasing. While there are many specific policy solutions to address each of these substantive problems, there are few “big idea” public policy solutions backed by solid research that address inequities across multiple areas.

One such “big idea” gaining traction is child development accounts (CDAs), also known as children’s savings accounts (CSAs). CSAs are designed to build assets for postsecondary education and training. As such, CSAs have the ability to address many inequities by improving educational, job, asset, and other outcomes for disadvantaged children, but only if they are universal—meaning, for every child– and progressive – meaning, disadvantaged children receive greater support.

Research shows that CSAs:

  • Support early childhood development;
  • Build financial capability;
  • Create a college-going culture; and,
  • Improve academics and college completion rates. For example, low-and moderate-income children with $500 or less in savings were three times more likely to enroll in college than children with no savings, and four times more likely to graduate from college than children with no savings. (Washington University, Center for Social Development, 2016)

At least eight states (Colorado, Connecticut, Maine, Nevada, New Hampshire, Pennsylvania, Rhode Island, and Vermont) have already created statewide CSA programs. These programs use state 529 college savings plans as the savings vehicle. Illinois’ Bright Start 529 college savings plan is an investment account administered by the Illinois State Treasurer that enables the account-holder to withdraw earnings tax-free for qualified postsecondary expenses. These accounts offer efficiencies through centralized administration, targeted investment options with the potential for investment growth, and restricted withdrawals. Most of these statewide programs open CSAs at birth with an initial deposit.

Illinois nonprofits, foundations, and financial institutions have been leaders in the development of CSAs since the earliest pilot programs. I administered a CSA pilot program in Illinois in 2004 to 2007 through the Sargent Shriver National Center on Poverty Law as part of the national SEED Demonstration Program. I later co-chaired the Illinois Children’s Savings Account Task Force, which produced a report and recommendations to the Illinois General Assembly. In 2017, the Illinois General Assembly nearly passed a bill creating a statewide CSA program.

Given the trends we are seeing about increasing inequities and the growing body of research showing that CSAs can help to reverse those trends, I think it is time for Illinois to adopt a statewide CSA program. Woodstock Institute issued a questionnaire to all Illinois candidates for Governor, Treasurer, and Attorney General to obtain their positions on CSAs. We have asked for responses by early September and we look forward to sharing the results with you prior to the November election.

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