October 8, 2015
Gloria Brainsby, Financial Advising Manager, Beyond Housing
Below is a full transcript of this video presentation. It has not been edited or reviewed for accuracy or readability.
Ray Boshara: I’m going to turn it over to Margaret, but Ezra, I think you couldn’t have teed up the next panel better, asking about the 529 Reform Agenda. Once again, we’ve managed to accumulate some of the Nation’s leading experts all in one room, at this time. So, Margaret, it’s all yours.
Margaret Clancy: Thank you. Thank you, Ray. While my fellow panelist are getting miked up, I’ll take a couple minutes to thank Ray Boshara and colleagues at the Federal Reserve for co-hosting this conference with us, Michael Sherraden and Ray have partnered on other conferences before, and it’s a pleasure to be here at The Fed, so thank you very much. I’d, also, just like to point out that there’s a folder in front of you that has materials that relate to 529 Plans SEED for Oklahoma Kids Research that some people have asked about that. Jin Huang talked about this morning, but there’s some policy briefs and materials from The Fed and others, so there’s more materials for you–for your interests. And I guess I’d just like to say–switch, then, gears. Everybody set? This panel is, as Ray said, about 529 College Savings Plans. Some years ago, Ray Boshara and Michael Sherraden and–when Ray was at the New America Foundation, we had something called the College Savings Initiative. Gates–Bill and Melinda Gates was one of the funders. And at that time, we didn’t have automatic deposits in Maine, statewide, as we have now. We didn’t have the check box enrollment in Rhode Island. We didn’t have the Nevada Plan and others. So, even though, as has been pointed out, 529s are regressive like 401K plans, the Home Mortgage Deduction, and other policies. There has been great strides in some areas of the country, and so, this session, specifically, will focus on 529s, which are long term in nature and have the potential for investment growth, restrictions on use, and other characteristics. And this panel will focus on inclusive features, such as automatic deposits and automatic enrollments that are key for asset accumulation for all children, which I think is the goal of the people in this room. So, today, I have the honor of working with this grand slam team, keeping with the baseball metaphor, here. Gloria Brainsby is a Financial Advising Manager at Beyond Housing in St. Louis, so she represents the Promise Accounts for Normandy, Missouri kindergarten students. And next, would be Clint Kugler, his name’s come up a couple of times. He’s the CEO of Wabash County YMCA, and Clint conceived of and the Promise Indiana Accounts, and we’ll share information about that innovative program. Next, Linda English, Deputy Treasurer for the State of Nevada. In Nevada, as one example, the–adding to the 2015 cohort, 95,000 children in the State of Nevada will benefit from the Kick Start Program, which automatically deposits into a 529 Plan, funds for every state resident kindergartener. So, Linda has been instrumental in getting that program off the ground, and she oversees the Kick Start Program, and it’s the largest program, in terms of number of children served, for children’s accounts. And last, but not least, Lynne Ward is Executive Director of the Utah Education Savings Plan, which is unique in its administration, the 529 administration structure, which facilitates collaboration with–which held developmental account programs throughout the country, so Lynn will speak about that. And with that, I’m going to turn it over to Gloria.
Gloria Brainsby: Hello. Good afternoon, everyone. It’s kind of overwhelming to sit on a panel with you all, but I will bring a local non-profit perspective, I guess, to the discussion. But, I can’t speak for everyone in the room, but I’m so motivated and inspired by the speakers so far. Right? Okay. Okay. So, I know. Just everybody’s been amazing. And at a few points, you’re like, “Awe.” I just want to tear up. I get really excited about this work. So, with that all said, I’m going to launch into Beyond Housing. Our Promise Account Program, it’s a $500.00 MOST 529 College Savings Account that we offer to all kindergartners entering the Normandy Schools Collaborative District. That is a mouthful, so I might just refer to it as Normandy, throughout this presentation. At Beyond Housing, we believe that every child should have the opportunity to attend college, and these Promise Accounts, they really help families get a jump start on their college savings and really help kids to start thinking about and preparing for college early in life. And I was just excited when Willy Elliot brought up this idea of salience and making college seem like it’s a reality, and it’s actually in the near future. So, we really hope, at Beyond Housing, that that’s one of the results that we see. At the district level, the Promise Accounts help to reinforce the college going culture and foster a community conversation that college is a real possibility for every child in that district. The Program is unique in Missouri, and it’s one of just a few, nationally, that offers such a generous initial deposit of $500.00. So, more broadly speaking, the Promise Account Program is part of Beyond Housing’s 24:1 Initiative. This is a place-based community development initiative that really partners and brings together the 24 different municipalities that make up the Normandy Schools Collaborative District, under this shared vision of strong communities, engaged families, and successful children. Beyond Housing and its partners are doing a lot more than just Promise Accounts. This is a comprehensive community development initiative. Honestly guys, there’s more than 100 different strategies that we’re doing, and that’s because we believe that strong schools are a critical foundation for a strong community. Funding for our Promise Accounts was made possible through the generosity of an anonymous, local family foundation, and it promised to fund these accounts for the foreseeable future. They were designed through an innovative partnership between Beyond Housing, MOST, which is Missouri’s 529 Plan, Vanguard, and Acentive, and we couldn’t do it without our partners. There’s one thing I can’t emphasize enough it’s that working together with a census to really create the program structure and working with the State of Missouri to create that was key and really, really brought the program to fruition. So, we completed our third year of enrollment last fall. That means that we’re currently in our fourth year of enrollment, right now. To date, 834 families have opened a Promise Account for their child, and with this year’s enrollment, we anticipate that we will be serving more than 1,000 families. Those 834 accounts represent a $417,000.00 investment, which as of yesterday, when I looked it up, I’m really pleased to say that it is now worth more than $461,000.00, which when you do the percent change, you discover slightly more than ten and a half percent. So, of course, we tell families we can’t guarantee that this investment is going to earn money, to grow, that there is risk involved, but that there isn’t any risk to them because the $500.00, well, it came from Beyond Housing and the funder, so fingers crossed that that continues. Really pleased with that growth.
Moving on and moving and forward, this academic year, the school district created a kindergarten center, so all the kindergarten classes are now housed in one building, and we really hope that actually serves to increase enrollment versus the previous years when we either had four or five elementary schools where we were trying to rollout the program. So, we shall see if it has that added benefit. I know that there are 333 kindergartners currently, and as of yesterday, slightly more than 80 percent had enrolled in the program. In previous years, our first year, we had a 62 percent enrollment rate. The third year, we moved up to 75, so we are trending in the right direction. Right? So, fingers crossed, right? So, I mean, like, how do we do this? It’s the partnership between us and the school district is very, very deep and of course, goes well beyond the Promise Account Program, but it was really only through working with key staff that we’re able to implement this program. And in fact, the application paperwork is embedded in the kindergarten registration paperwork. And for those families that don’t open accounts at registration, we continue to engage them at further touch points, be it back-to-school events or, as I talked about yesterday with one of my colleagues, the fact that we have parent liaisons in each school, and that parent liaison is a staff person that’s tasked with building the relationship between the school district and the family and providing them access to other resources that Beyond Housing and Beyond Housing’s partners have. So, these parent liaisons are doing home visits, in order to enroll kindergartners this year. So, I mean, I–those days sort of feel like they’re gone to me, when your teacher used to show up to your home, before the school year started, sort of, meet the family. This is an incredible resource effort, in order to increase enrollment. Another thing we do, we plan to keep an–oops, okay, I’m rushing. Beyond Housing plans to keep in touch with families that open a Promise account, we use them as entry point to connect families, as I mentioned, to all the other resources. So, some quick facts: $500.00, 529, the accounts are optional, so families do have to opt in and find an enrollment form, Beyond Housing is the account owner, the child is the beneficiary of a sub-account, so families can’t contribute, but are absolutely encouraged to open up their own account. Funds can only be drawn by Beyond Housing and only for college expenses. All funds are invested in an age-based moderate allocation, and the parents, guardian receives quarterly statements. Random, but interesting with that, a census, brilliant partner, they have allowed us to send them a document that they actually print, and stuff, and mail with that quarterly statements to families, so that it gives Beyond Housing another opportunity to discuss the different programming and resources available in their community related to this program and encourage parents and families to do things like, “Please share this quarterly statement with your children, because we know what the evidence says about the importance of talking to your child about this. We want them to be very aware.” Anyway, okay.
So, last but not least, just last week in¬–I’m in to you, sorry, Margaret. Beyond Housing is deepening a partnership with another local non-profit present in this room, Prosperity Connection, so we are going to be offering, in some manner, a more robust and integrated financial education services to the families in this program. That’s really exciting because of scalability and engaging more than 1,000 families, it’s not something that we have been able to do currently, but we will be doing soon. So, TBD on that.