Why this strategy?
All babies are brilliant and full of promise! Research has shown that children from low-income families who have a college savings account in their name make better progress in their early social and emotional development and are more likely to attend and complete college when they are older. Being a parent of a new baby is both wonderful and challenging. Supports that reduce financial stress and help parents pursue their goals build confidence about the future and more energy for parenting.
Key research findings
Children receiving a child savings account (CSA) at birth score better on socio-emotional development indicators than their counterparts without CSAs. These positive effects are strongest for low-income babies and occur regardless of the amount or frequency of deposits their parents make. (Huang et al., 2014)
How will it work?
Establishing a college savings account for babies born into economically vulnerable families:
Working through participating new-baby home visit and maternal support programs, we will open a college savings account for participating babies, seeded by an initial $500 deposit. This account will be a source of inspiration to new parents and a meaningful early investment in their baby’s bright future and academic success.
Supporting new parents in practical and financial ways:
Brilliant Baby parents will be offered the chance to participate in a Coaching & Savings Program designed to support them as they pursue their hopes and dreams for their family. A supportive and caring financial coach will help parents set and pursue their financial goals. parents engaged in the coaching program have the opportunity to earn an additional $500 toward their goals.