It was more than two years ago that Laura Soltau, the executive director of the Teton Literacy Center, sat with a small group of students and was moved by a student’s story that got to the heart of the “elephant in the room.”
“In one of the small groups, we talked about some of the students’ hopes and dreams,” Soltau said. “And one of the students talked about how they hoped to afford college one day but didn’t want to put the financial burden on her family.
“I thought, what a mature and responsible person to be thinking about her family, and how that weighed on her to pay for higher education.
“That was the moment that I thought, we cannot ignore this elephant in the room any longer.”
Although 40% of Teton Literacy Center families earn below $50,000 annually, Soltau said current data suggests that if a student had even $1 saved for college by the time he or she graduated from high school, that student would be three times more likely to attend college or another type of postsecondary program, and four times more likely to graduate.
Additionally, Soltau pointed to a study that is forthcoming in the Journal of Children and Poverty that found that among youths who expected to graduate from a four-year college, those with a savings account in their name were approximately six times more likely to attend college than those with no account.
It was here between these conversations and statistics that the idea of funding students’ postsecondary education took root. Could the nonprofit literacy organization establish a program that funded college aspirations and professional dreams? It would, after all, be the first of its kind in Wyoming.
The Teton Literacy Center staff formed an advisory committee to wrestle with the idea of how and if it could fund students’ postsecondary education, whether that is a vocational pursuit, community college or a four-year university. Bill Best, who sits on the advisory committee, said not everyone was on board at first.
“Some were concerned that this project was outside of the scope of our mission,” Best said. “Our mission is literacy, and we work to encourage our children to be better students. We went through a very thorough process, and it took several meetings to get everyone on board. Our philanthropic goals are to promote children’s health and education, and for me the most important part of this pilot program is the long-term support of those goals.”
Working through COVID-19 shutdowns didn’t deter the team at the Literacy Center, and by early 2021 the Funding Futures project was launched as a pilot program.
And then it took off, soaring in ways that delighted and surprised staff and board members.
“I’m really impressed and proud of these families,” Soltau said. “We knew there would be excitement around this, and we knew families wanted this, but we didn’t think we would have 85% of parents participate or save that kind of money.”
To date, more than 25 first-time participants have saved $6,300 of their own money, collectively. Private matching donations, seed money and incentives have added another $7,500 to the funds.
“In these last six months I’ve put at least $200 in my daughter’s account every month,” said Marlen Ramos Nava. “My daughter isn’t even in kindergarten yet, and I can’t imagine how much [the college savings] will grow. I went to college and did not have a college savings account, and I know how expensive it can be.”
The Funding Futures program is built from a variety of academic studies and borrows from established models that have proved successful in other cities, such as Boston and San Francisco.
With the support of the local U.S. Bank, the Literacy Center advisory board worked with financial advisors to establish hybrid savings accounts that serve as both personal savings accounts and as 529 education accounts.
The 529 account, otherwise known as a college savings account, or CSA, is a specialized investment tool with tax benefits that can be used only for educational expenditures. So in the case of creating a hybrid account, Soltau said it was important for Literacy Center families to have access to their savings, particularly in the event of an emergency.
The Funding Futures program was offered to pre-kindergarten parents, who were only asked to open an account with an anonymous donor seeding the CSA with $175 — $25 of which went into the personal savings. As incentives to encourage greater savings, families can earn additional funds from the donor when they attend financial planning classes, enroll their students into tutoring programs and attend Teton Literacy Center classes.
Using a national financial program through the U.S. Bank, families can watch their money grow in tandem with the 529 and savings accounts. The local bank established the accounts for participating families as a courtesy.
The 529 account is unique because the money saved grows as stock market investments grow. For example, if a person adds $1,000 to a CSA and the market grows by 5%, that account will grow to $1,050, thus earning $50 over what was saved.
A CSA account can also dip with the markets, too, and Best said that’s where families needed to stay the course, because markets bounce back.
If a family moves away and is no longer living in the area or even the state, the account will follow them.
“I think in general it’s important to have a good education,” Ramos Nava said.
“I also know a lot of Latino families are worried about finances after their child leaves high school, and many are staying here,” she said of students’ plans after high school. “They are living with their families and trying to take community college credits locally because costs are high.”
Ramos Nava said the savings and incentives have helped her dream bigger for her own daughter’s future.
“For me, personally, this will help [my daughter] in the future,” she said of the CSA account. “I know that if she’s passionate about something, I don’t want to say no because we don’t have enough funding. If I keep saving, I know she will strive to get a better education.”
Best is hopeful for the next preschool class to be offered the option of the CSA investment program.
“As this grows, we’ll continue to look for funding from others in the community,” Best said. “We would hope that we could make this available to every student at Teton Literacy. We are going slow and understand that everyone’s life is a little different.”
“Based on the success of this pilot, we would love to continue expand and grow this effort,” Soltau said.