Pa.'s education savings for every child moves forward

Joe Torsella-09032018-0001
State Treasurer Joe Torsella and supportive lawmakers (including Philly Sen. Vince Hughes, behind Torsella), at a recent Harrisburg news conference announce the start of a program to help kids save for education.

This is one of those stories that gets lost amid focus on nothing but news of the moment. Overlooked while we all look over the latest on Trump, Korea, elections, gun violence, Stormy Daniels, whatever.

Yet it’s a story of potential long-term positive change in a state long lacking in same.

At a recent Harrisburg news conference, State Treasurer Joe Torsella announced the start of an effort he ran on in 2016, stressed at his 2017 inaugural, and pledged to push in office.

It seeks to improve and encourage access to education beyond high school – college, trade, vocational, associate degrees – for every child born or adopted in Pennsylvania.

That’s roughly 140,000 kids a year.

It’s dubbed Keystone Scholars. It uses philanthropic sources, not tax dollars, to create college savings accounts managed by the Treasury Department, and automatically deposits $100 at birth to get families started.

At birth, Torsella says, because that’s when parents are most optimistic about their children’s future.

Now the C-note clearly is not offered as a solution to entry/financial issues often surrounding higher education. But, says Torsella, it can make “a meaningful difference” for many families.

He cites research showing kids with from-birth accounts are three times more likely to get post-secondary education or training; four times more likely to graduate.

“This is about trying to change expectations,” he tells me, “and reassert a sense of community that says ‘we believe in you and are, in fact, dependent on you. … We want you to see yourself as having a future after high school.'”

The effort could involve extra deposits for low-income families and milestones in education levels and grades.

It’s starting as a demonstration project in six counties (Delaware, Elk, Indiana, Luzerne, Mifflin, Westmoreland), offering a mix of urban, rural, and suburban residents.

Initially, $2.5 million in private funds will open accounts for every baby born or adopted in those counties from Jan. 1, 2018 to Dec. 31, 2019.

Meanwhile, bipartisan legislation for a statewide program is being pushed by Sens. John Gordner (R., Columbia), Vince Hughes (D., Phila.), and Rep. Duane Milne (R., Chester) with a goal of passage this year.

Every state, including Pennsylvania, offers education savings plans. But such plans tend to be underused. And used by those needing them least.

Torsella says just 7 percent of Pennsylvania families use the state’s 529 College Savings Program, and use by families in wealthier counties far outstrips use in poorer counties.

Only four states (Maryland, Maine, Massachusetts, Nevada) offer plans akin to Torsella’s. If Pennsylvania’s goes forward, it would be the largest.

And while the initial $100 might not seem like much, Torsella argues that automatic starters encourage savings.

He quotes Ben Franklin: ” ‘The money that money makes, makes more money,’ ” and says, “If you save just $25 a month, by the time your child is a senior in college, you’ll have $14,000.”

With Pennsylvania first in the nation in student debt ($35,185 per grad; well above the national average of $27,975), $14K would help reduce fiscal burdens.

There are other reasons this program is right for this state.

It’s future-oriented, and too few in Harrisburg think about the future, save for piling up future debt.

Too many jobs require education. Georgetown University’s Center on Education and the Workforce says more than 95 percent of jobs created since the 2008 recession went to those with at least some college education.

Census data show Pennsylvania last among Northeast and Mid-Atlantic states in percentage of residents (29.3 percent) with more than a high school education.

A new WalletHub report, “Most & Least Educated States,” ranks Pennsylvania 30th – lowest among Northeast and Mid-Atlantic states.

And Pennsylvania is next to last (thanks to Maine) among Northeast and Mid-Atlantic states in median household income ($55,702).

These things are interconnected. They affect quality of life. If any one of them improves, all of them can improve.

All it takes is less focus on news of the moment, or the next election, and more attention to real needs – and the foresight to work to meet them.