Postsecondary education (PSE) is an important predictor of a person’s future economic and personal wellbeing, and a key component for families trying to build better opportunities for themselves. Tools designed to help families save for PSE, such as 529 tax-advantaged educational savings plans, have the potential to make PSE more accessible for many more families in America. Unfortunately, due in part to a number of barriers that can make it difficult for many families to access and engage with these accounts, less than 1% of families with household incomes under $75K currently save in 529s or similar savings vehicles.
Through BlackRock’s Emergency Savings Initiative, Commonwealth partnered with Brandeis’ Institute for Economic and Racial Equity to better understand how 529 plan administrators across the country (and those partners that work with them) are thinking about this disparity of users, and what strategies are being utilized to help address it. Through analysis of publicly available data and interviews with 13 people from within the broader 529 plan landscape (state agencies, treasury departments, and other governmental organizations, as well as recordkeepers, investment administrators, and other financial organizations), we sought to better understand three main questions:
- What strategies have 529 programs identified to address barriers to engagement?
- What are the key levers of change to address families’ barriers?
- What is standing in the way of innovation, and what can be done about it?
Read more in our report Increasing Access to Postsecondary Education Savings.
This work was made possible thanks to the generous support of BlackRock’s Emergency Savings Initiative.