Oklahoma newborns get higher education funding boost

Journal Record, The (Oklahoma City), Jun 4, 2008 by Janice Francis-Smith

Raishonta Hudson of Oklahoma City thought it had to be some kind of hoax. Hudson received a package in the mail barely two weeks after giving birth to her son, Deaqualian, in June. The letter said complete strangers wanted to pay $1,000 toward her baby's college education.

"Nobody gives you anything for free," she said, tossing the package aside. "You always wind up have to pay for something." A few months later, a representative from the organization making the offer showed up on Hudson's doorstep.

"Once I understood what the program was about, I got really excited," Hudson said. It turned out to be a legitimate proposition offered as part of a unique research project. The state of Oklahoma won a competitive bidding process to be selected as the test site for an initiative of the Center for Social Development at the George Warren Brown School of Social Work at Washington University in St. Louis. The program is funded with help from the Ford Foundation, the Charles Stewart Mott Foundation, and the Lumina Foundation for Education.

Michael Sherraden, Ph.D., founder and director of CSD, said the Saving for Education, Entrepreneurship, and Down Payment - or SEED - accounts will provide state and federal officials crucial information that could lead to a significant, nationwide policy shift.

The big question the SEED program seeks to answer is this: If the government takes the first step and creates a $1,000 college savings account for a child who may not otherwise be destined for college, will that encourage the parents to follow through and take steps to ensure that child becomes a college graduate?

"We believe this has the potential to break the cycle of poverty," said Gov. Brad Henry. The governor and state Treasurer Scott Meacham stressed the importance of increasing the number of college graduates in the state, which earlier studies have shown has a powerfully positive effect on a state's economy and quality of life.

The idea is not completely new, said Sherraden. In the United Kingdom, families receive a voucher that can be used as a deposit toward their child's college education, he said.

"The theory behind SEED OK is to determine how saving and accumulating assets within a household affects the family and educational achievement of children," Sherraden said.

"We anticipate that having an account for college education will lead parents to think positively about college opportunities for their children. Maybe they will be more likely to turn off the TV and read to their young children. We will be asking these questions."

Oklahoma has embarked on a seven-year study. Half of the 2,708 randomly selected families will receive a $1,000 special SEED-OK account in the Oklahoma College Savings Plan.

The other half - the control group - received an account without an initial deposit from the program. Depending on income eligibility, the money parents contribute to the account may be matched by the program, up to $250 per year for four years.

Long after the seven-year study has ended, participants will continue to be monitored until the children reach college age, said Sherraden.

The SEED for Oklahoma Kids project will be one of the best and most informative research projects ever conducted, he said.

Other states and the federal government will be watching to see if the program has the desired effect of producing more college graduates.

If so, one day every child in America could start life with a college savings account.

Already, the program has made a difference in the lives of Deaqualian and his mom, who described the program as "promise for the future."

"Here's someone who out of the clear blue is offering to give $1,000 toward my son's education," said Hudson.

"That calls for some initiative on my part, because it's true - nobody gives you anything for free. We're going to do this. We're just elated to be chosen for this."