Inclusion in 529 Savings Plans: Evidence from Maine
The concept of universal and progressive accounts beginning as early as birth was introduced in the United States in Assets and the Poor (Sherraden, 1991). Since that book’s publication, many applications of asset-building policies have been initiated. The first statewide Child Development Account (CDA) in the United States, Maine’s Harold Alfond College Challenge, stands as a shining example of this work. Maine achieves universal participation because all state-resident newborns (and newly adopted infants) are eligible and automatically enrolled in the College Challenge. Prior to 2014, the College Challenge had an opt-in requirement—in which parents had to enroll their newborns in the state’s NextGen 529 college savings plan to receive a $500 grant. CSD studies the College Challenge and documents this CDA’s evolution.
In 1999, Maine implemented an innovative matching grant program, the NextGen College Investing Plan®. NextGen was designed to increase participation and savings among low- to moderate-income families in the state’s 529 College Savings Plan. Using in-depth interviews and telephone surveys, we investigated which participants benefited from the unique features of the NextGen program and whether the program’s unique design helped participants to save.
Funding Partner: Charles Stewart Mott Foundation, Lumina Foundation for Education, Citi Foundation
CSD Policy Director,
Director of College Savings Initiative and SEED for Oklahoma Kids
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