Named for the applicable section of the federal tax code, 529s are state-sponsored plans that allow individuals to save for post-secondary education. Although specifically created for college savings, aspects of their design—including centralized accounting, low deposit minimums, and matching provisions—make 529s an attractive tool for developing CDAs in the US. CSD’s SEED for Oklahoma Kids initiative, which models a universal CDA program, uses 529 accounts as the savings vehicle.
Some 529 plans are more inclusive and innovative than others. Some states, for example, provide a one-time initial match, while others offer annual matches to a limited number of low-to-moderate income families. CSD research focues on state policies and practices that seek to broaden the reach of 529s and improve their effectiveness. Through 529 policy research, CSD aims to inform development of inclusive 529 savings policies at federal and state levels.
CSD recently began a collaboration with the New America Foundation called the College Savings Initiative. Supported by the Bill & Melinda Gates Foundation and the Lumina Foundation for Education, the initiative focuses on research and policy design for more inclusive 529 college savings plans. CSD and the New America Foundation will study state-sponsored 529 plans to inform state and federal 529 policies, as well as college aid policies. Ultimately, the initiative aims to increase access, performance, and completion of post-secondary education among low- to moderate-income students.