2. Solving the Funding Equation Using Higher Education IDA’s Brad Roediger Katina Fullen Felicia Mitchell

3. Individual Development Account “a trust created or organized in the United States exclusively for the purpose of paying the qualified expenses of an eligible individual…” Title IV Assets for Independence Act Section 404 (5)(A) Eligible Individual- Any individual that is part of a household with an adjusted gross income equal to or less than 200 percent of the poverty line. Qualified Expenses- Any expense associated with purchasing the specified asset. o First Time Home Purchase o Qualified Business Capitalization Expenses o Postsecondary Educational Expenses

4. Individual Development Account “Few people have ever spent their way out of poverty. Those who escape do so through saving and investing for the long term.” Michael Sherraden Director of the Center for Social Development Washington University, St. Louis

5. Assets for Independence Act 42 USC 604 United States Department of Health and Human Services o Administration for Children and Families o Office of Community Services Ohio Community Development Corporation Association (OCDCA) o GCCSP works as a sub-grantee

6. IDA’s for College Access Provide up to $2,000 in additional scholarships to qualifying students Can help with the retention of students Allows for an enhancement of follow up services while student is enrolled in college

7. Components of Individual Development Accounts Matching Funds- Nonfederal matching dollars Participants- Students, Parents of Students, IDA Savings Plan o Savings Goal

8. Components of Individual Development Accounts (cont.) IDA Savings Account o Local Banks to House Account o Emergency Withdrawals Reserve Account o Required to House Matching Funds

9. Components of Individual Development Accounts (cont.) Financial Literacy Education Training o Asset Specific o General Financial Literacy Training Case Management o Throughout Participants Savings Term o Most Intensive Part of Program

10. How the Scholarship is Doubled Student Savings GCCSP uses.5:1 Ratio Generally 1:1 Ratio Matching Funds Local, Non-federal Match- Scholarship Federal Match Total Scholarship Local non-federal match added to Federal match

11. Benefits of IDA Accounts Ability to Double Student’s Scholarships o Matching Local Dollars and Federal Dollars Provide Financial Literacy to Program Participants o Add another layer to College Access Advising Provides Some Administration Fees o Services are Financially Provided for at 17%(15% as sub-grantee)

12. Benefits of IDA Accounts (cont.) Create New Partnerships with Local Businesses o Banks o Educational Institutions o Donors with Matching Funds Create New Awareness for your Program o Creates an Avenue for Initial “Ask” for Donations

13. Risks of IDA Accounts Large Amount of Participant Screening o Regulation of Participants Participant Dropouts o May Limit Use of Organizational Resources Large Amount of Supervision o Some Financially Provided for via Administration Fee

14. I Know I Can’s IDA Program Partnership between I Know I Can and ECDI (Economic and Community Development Institute), with financial support from the JPMorgan Chase Foundation. In its 2 nd year with programming available to students and families in middle school through college.

15. IKIC/ECDI Memorandum of Understanding (MOU) ECDI’s Role Management/Administration Grant submission to AFI Financial oversight of AFI accounts Bank Account management Withdrawal activity Grant administration/reporting IKIC ‘s Role Program Activities/Services Outreach & recruitment Financial planning Deposit monitoring Relationship with students/families Manage communication with/to students/families/colleges Fundraising for program expenses Partnerships with OSU/Treasurer of State

16. Save Smart IDA Set-Up Process 1.Family/Student attends an Information Session hosted by IKIC and ECDI 2.Family completes an application along with supporting documents including: driver’s license, social security card, proof of income (tax return, W-2s or most recent pay stubs), and $25 to open the account 3.Within two weeks, family receives Bank Account Welcome Packet with account number, receipt for first $25 deposit, account ledger, and map of local/national bank locations 4.IKIC provides quarterly updates to families on account balance and progress toward savings goal 5.IKIC offers financial planning workshops for participants throughout the year

17. Save Smart IDA Matching Process 1.Student/Family reaches savings goal of $500 or $1,000 2.IKIC verifies that student is receiving IKIC grant and has completed financial planning 3.IKIC sends a letter to the student to congratulate them on completing the program and to invite them to continue on as a second/third year participant 4.IKIC invoices ECDI for AFI funds for qualified students, which includes the participants’ savings and the match 5.IKIC sends the checks to the colleges/universities with a letter specifying what type of payment it is and how to apply it to the students’ accounts (process happens three times per year – Sept/Dec/March)

18. Save Smart Financial Planning Partnership among IKIC, OSU Extension, and State of Ohio Treasurer’s Office 4-hour workshops offered approx. 10 times per year at the IKIC office to accommodate college students’ schedules Workshop consists of the following topics: – Understanding Credit – Understanding Financial Aid – Real Money Real World (adapted for college-aged students) – Budgeting/Saving – Basics of Taxes

19. IKIC’s Two IDA Types Save Smart Sr. Eligible high school seniors, current college students and their families who meet income and IKIC grant requirements, save $500 over a minimum of 6 months, and complete four hours of financial planning offered by IKIC. Save Smart Jr. Eligible 7 th, 8 th, & 9 th graders and their families who meet income guidelines and IKIC grant requirements upon HS graduation, save $1,000 over four-five years, and complete a select number of financial planning hours per year.

20. Save Smart Sr. IDA Example Faith ‘s SavingsIDA MatchIKIC GrantTotal College Year 1$500$1,000$1,200$2,700 College Year 2$500$1,000$1,200$2,700 College Year 3$500$1,000$1,200$2,700 College Year 4$500$1,000$1,200$2,700 TOTAL$2,000$4,000$4,800$10,800

21. Save Smart Jr. IDA Example *JP Chase will donate $800 to each family receiving the IKIC grant for the first year of college Terrell‘s SavingsIDA MatchIKIC GrantTotal College Year 1$1,000$2,000*$2,000$5,000 College Year 2$500$1,000$1,200$2,700 College Year 3$500$1,000$1,200$2,700 College Year 4$500$1,000$1,200$2,700 TOTAL$2,500$5,000$5,600$13,100

22. Success to date IKIC and ECDI has enrolled over 250 families Participants have completed over 700 hours of financial planning Participants has saved over $80,000 in their own money for college To date we have matched a total of 167 accounts with 30 of those being continuing savers