Can This Children's Savings Program Get More West Virginians to Go to College?
As children in the Mountain State head back to school, there's reason to celebrate. Last week, West Virginia's Treasurer, John Perdue, announced a new program, Bright Babies, to help give the state's children a boost in saving for college. The Bright Babies program contributes $100 into a 529 college savings account for every child whose parent opens an account within a year after the child's birth or adoption. West Virginia joins several other states— including Nevada, Maine, Rhode Island and Connecticut—that have statewide, universally-available Children's Savings Account (CSA) programs.
The groundwork for this program was laid over a year and a half ago when Beth Wehrle, an advocate originally from West Virginia, learned about CSAs and the impact of savings on college graduation from Prosperity Now President Andrea Levere. Beth immediately thought that a CSA program would be a great thing for her home state of West Virginia, which currently ranks last among states in the percentage of the population over 25 who have a bachelor's degree.
Beth brought the idea to two prominent West Virginia nonprofits, Kanawha Institute for Social Research & Action (KISRA) and the West Virginia Alliance for Sustainable Families, both of which promote policies and programs that help to build assets and economic opportunity for low-income families. Leaders at both organizations—particularly Michelle Foster, Executive Director of KISRA—were excited about the idea of bringing a CSA program to West Virginia. They created a consortium of groups interested in promoting a CSA program in the state, including foundations, asset-building organizations and education groups. The consortium decided that rather than starting with a small community program, it would take the idea of a statewide CSA program to the state treasurer's office.
Beth Wehrle credits a combination of persistence, luck and an innovative state treasurer with bringing Bright Babies into being. The group had just one meeting with Assistant State Treasurer Josh Stowers to discuss the idea. So they were genuinely shocked and thrilled when they met with Treasurer Perdue, and he told them that he planned to launch a statewide universal program within a few months!
Treasurer Perdue's ability to create and launch this program reinforces what we've learned about the role of state treasurers in expanding CSAs from other states, such as Rhode Island and Nevada. State treasurers who manage their state's 529 plans can leverage that role to start a CSA program, without going through the legislative process. We hope that more treasurers will follow the lead of Perdue and other innovative treasurers—such as former Nevada Treasurer Kate Marshall and former Rhode Island Treasurer and current Governor Gina Raimondo—and will create the next wave of statewide CSA programs. We also hope that West Virginia will move towards an opt-out model for Bright Babies—like the programs in Maine and Nevada—so that all West Virginia children will automatically have money put away for their future starting at birth.