Philadelphia, PA –Joe Torsella, the lone Democratic candidate for Pennsylvania State Treasurer, released his plan for Keystone Accounts: universal, automatic Children Savings Accounts (CSAs) for every child born in Pennsylvania, designated for college or other post-secondary training.
“I’m running because I think the Treasurer has a vital role to play in addressing the great challenge of our time: turning back the rising tide of inequality, rebuilding our middle class, and creating opportunity for every Pennsylvanian,” said Joe Torsella. “There are 150,000 kids born every year in our Commonwealth. I want every single one to grow up saving money, fully participating in the financial system, and planning for a bright future as a college or vocational school graduate.”
To Read the Entire Plan Go Here: www.joetorsella.com/keystone-savings-accounts/
As State Treasurer, Joe Torsella will work with Pennsylvania stakeholders — in government, the philanthropic and non-profit sector, and others — to implement a plan for universal Children Saving Accounts (CSAs) for every child born in Pennsylvania, seeded at birth with a modest deposit and designated for college or vocational training. The plan is modeled on similar programs underway in Nevada, Maine and Rhode Island, none of which use public funds. New research suggests that children with bank accounts at birth, even with small balances, are up to seven times as likely to attend college or other post-secondary training. And for those children, a college degree can mean up to a million dollars more in lifetime income. Accounts would start at birth or early in life, since researchers find that financial resources have their strongest effect on children’s educational outcomes early on in the child’s life, not at the point of college entry.
In deciding on implementation details, Pennsylvania would have the ability to learn from the best practices of other jurisdictions such as Nevada, Maine, Rhode Island, and Tennessee as well as the considerable research on how to make CSAs most effective. That research and the experience of other states, Torsella said, suggest the following principles that should guide Pennsylvania’s program:
- Universal, Automatic Account Establishment and Initial Deposit. A Universal Automatic Account given to all children helps families from all income levels.
- Starting at Birth to Maximize Growth. The establishment of CSAs at the birth of the child is the gold standard because it gives the funds the longest amount of time to grow under the effect of compound interest.
- Restrictions on Use.The accounts grow over time until the account holder comes of age, to be used only for post-secondary education purposes, including vocational training. The distribution of the funds would be sent directly to the education provider.
- Efficiency and Accessibility Allows for Hands-on Help.While continuing to promote and educate about Pennsylvania’s 529 college savings plans, the Pennsylvania State Treasurer’s office will create a comprehensive, coordinated campaign promoting this new umbrella plan. By simplifying the process of enrollment, the Treasurer’s office can work with families, businesses and communities to provide a long-term comprehensive college savings strategy.
“With the third-highest student debt load in the country, and the average four-year degree in the state costing over $45,000, it’s time for Pennsylvania to lead the way in pioneering new ways to help make college or vocational training a reality for students in every zip code,” Torsella said. “As Pennsylvania State Treasurer, I will.”
Joe Torsella has spent his life in public service making public institutions more efficient, more transparent, and more innovative. As Ambassador to the United Nations for UN Management and Reform from 2011 to 2014, Torsella was the architect and chief public spokesperson for the U.S.-led reform of the UN’s $36 billion budget. As Deputy Mayor of Philadelphia, Torsella helped Ed Rendell close a $1.25 billion deficit. Torsella was the founding CEO of the National Constitution Center, helping it go from virtual bankruptcy to national treasure.