Our Turn: Savings accounts point to brighter futures

For the Monitor
Sunday, May 08, 2016

Holly Ramer’s article “N.H. considers bill to help kids save,” (Sunday Monitor Local & State, April 24) provided an excellent introduction to the N.H. Children’s Savings Account Program legislatively enacted in 2015. Reasons for such a proactive initiative were cited in a study completed in 2014.

In New Hampshire, as in the rest of the nation, completing post-secondary education is the surest route to economic mobility. Adults with college degrees earn roughly twice as much over their lifetimes as those with a high school diploma or less.

New Hampshire does quite well in college attainment. According to a recent report by the D.C.-based Corporation for Enterprise Development, New Hampshire ranks eighth nationally, with more than 35 percent of adults holding a college degree.

Unfortunately, the CFED also reports that 76 percent of New Hampshire’s students graduate with debt that averages over $33,000 per student – the second highest in the nation.

This does not bode well for New Hampshire’s economic future, nor does it encourage the next generation of students to consider post-secondary education

Our nation’s and New Hampshire’s demographics and trends of increasing child poverty have led a growing number of states, counties and cities to introduce savings programs to help young students establish bank accounts and build savings and aspirations for career and college success.

CSA programs combined with financial literacy education provide incentives to help children save by seeding accounts with a small amount of money, and matching deposits by family, friends and the students themselves.

Accounts, even with small balances, can have a profound impact. Research indicates that children from low- and moderate-income families with college savings of as little as $500 are three times more likely to enroll in college and four times more likely to graduate.

Every New England state including New Hampshire has CSA programs in progress ranging from $50 to $500 per child.

In 2015, the N.H. Legislature created a commission with specific tasks to address: to establish two pilots including the necessary administrative and operational procedures, fundraise, develop an accountability system, and strive to ensure that programs engage both parents and children in financial literacy education.

New Hampshire’s major goals are to promote saving as well as to create a fund to support the students’ next steps after high school graduation. Successful CSA programs across the U.S. all began with pilots before expanding to involve all children in the state.

In January 2016, SB 408 was introduced in the current legislative session requesting $50,000 to fund CSA programs in Coos County and the city of Manchester, specifically to seed accounts with a $50 initial deposit for each child attending kindergarten in the pilot schools. If passed, it will be matched by an additional $50,000 of private funds.

N.H. students deserve the same opportunities for post-secondary education and future success as peers in New England, and Utah, Oklahoma, Indiana, Nevada, Colorado, Illinois, Boston, San Francisco, etc., all of which have CSA programs with many more in progress.

New Hampshire’s future workforce and economy demands it.

(Rep. Mary Stuart Gile lives in Concord. Carl Rist is director of children’s savings for the Corporation for Enterprise Development.)