Designing and Implementing a Savings Campaign in Texas RAISE Texas Summit Federal Reserve Bank of Dallas—Houston Branch October 29, 2012 Laura Rosen

College Savings in Texas  Texas Tuition Promise Fund (prepaid) & Texas College Savings Plan  Assets Exempt from Public Benefits & State Financial Aid  Texas Save & Match (HB 3708)  Targeted for Students in Free & Reduced Lunch (economically disadvantaged)  Texas Match the Promise Foundation – Platform to accept private (and public) $ to be used for 529 college savings matching grants

Texas 529 Plan Enrollment Barriers  Plan awareness  No retail presence  State Securities Laws  Only broker-dealers and certified investment advisors can provide enrollment assistance and advice  Nonprofit partners handcuffed in marketing/enrollment role  No default investment option for either plan  Some families not ready to overcome these barriers  For families that are…

Match the Promise Scholarships Up to $500 match on tuition unit purchases Approximately150 awards Matching Scholarship $2,000 tuition grant 5 awards Promise Scholarship

Scholarship Application Timeline Sept. 1- December 31, 2012 Scholarship Application Period March 31, 2013 Scholarship Award Notification August 31, 2013 Scholarship recipients have until this date to meet contribution requirement

Scholarship Eligibility  Grades - Students in grades 6-9  Account Ownership – Must have a Texas Tuition Promise Fund account or enroll by 12/31/12  Tx Residency – Must be a Texas resident and a dependent for tax purposes of a Texas resident  Family Income - $75,000 or less  Savings Contribution - Minimum $100 contribution to Promise Fund account during the current sales period – September 1, 2012 – August 31, 2013  Career Essay – Submit word essay about the career in which the student is interested  Report Card or Transcript – Submit report card/transcript  Initial Pool – 797 account holders potentially eligible

Marketing the Scholarship: Opportunities & Challenges  No Action Letter from State Securities Board - Allows volunteers to distribute information about the scholarship  Constraints of Match the Promise Foundation Volunteer Instructions  “The most a volunteer can do is hand out an information packet. A volunteer cannot suggest verbally or in writing that a person apply for the Match the Promise program or open a Texas Tuition Promise Fund Account.”  Only registered broker-dealers, an agent of a broker dealer, and investment advisor or an investment advisor representative can assist a person in opening an account.

 Social media related to scholarship deadline  Newsletter article  Distribute packets, particularly to partners that serve children in grades 6-9 Ways to Promote the Scholarship

Next Steps  Pursue additional policy change to enable 529 enrollment assistance  Engage more systems to raise awareness:  Hospitals  Schools  After-School Programs  Explore alternatives for college savings products to leverage, such as prepaid cards  Evaluate Pilot & Make Recommendations

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