I Have A Dream Foundation: A College Savings Account With a Roadmap to Postsecondary Education

The “I Have A Dream” Foundation (IHDF) famously launched in 1981 when businessman Eugene M. Lang supported a group of students from his East Harlem childhood elementary school in paying for college. Over the years, more than 200 “I Have A Dream” programs have operated in 28 states, Washington, D.C., and New Zealand, serving 18,000 students. IDHF has continually evolved its program model to find the most strategic ways to support students. Today, college savings accounts (CSAs) have become a key pillar of IDHF's work.

In 2013, IHDF piloted its DREAM Accounts Program. Since then, the program has grown to 600 students and sites in New York, Iowa, Colorado, and Oregon with more expansion planned. The goals of DREAM accounts are to encourage a college-going mindset in first-generation, low-income students and to allow community members to support a student’s path “to and through college” by making donations to fund accounts. IHDF, with support from fellow NCAN member uAspire, also piloted a financial literacy curriculum to inform low-income students and families about banking, saving account interest, compound interest, and budgeting. IHDF provide students with individualized support in seven key areas to develop the skills and knowledge to succeed in their postsecondary education and beyond. Additional program supports include a summer college immersion program for middle and high school students as well as a near-peer mentoring program for students in college. Collectively, these program strategies provide comprehensive college access and success support to students over many years.

This college savings strategy was inspired by U.S. Senator Christopher Coons (D-DE), who previously served as an IHDF national board member and staff member. Coons’s leadership and research from Washington University in St. Louis about the psychological benefit of having a college savings account affirmed IHDF’s decision to move forward with this strategy. “We set aside money that serves to offset the cost of tuition. We work 10 to 15 years with our students as early as kindergarten and once they are ready to go to college, we release the funds directly to that institution for higher education expenses,” Eugena Oh, IHDF president and CEO, said.

The DREAM Accounts Program allows students to earn account contributions by completing critical behavioral, academic, and social milestones in three categories: achievement-based, equity-based and effort-based. An example of an achievement-based milestone is a student who earns a 3.0 grade point average or takes the PSAT or practice SAT. Equity-based milestones include attending and actively engaging in IHDF program events. Effort-based milestones include community service, such as participating in a march or service project. Once a milestone is achieved, student’s account are funded and they can log onto their accounts and see that a deposit was made. A student’s earning potential ranges between $1,500 to $2,500 in deposits. The amounts vary among program sites and depend on current funding.

IHDF partners with the nonprofit My529 (formerly the Utah Educational Savings Plan), which Oh says that My529 has worked hard to customize their accounts to IHDF’s needs, and it is nationally recognized as a highly rated plan by several independent financial advisory firms and organizations. Laura Perischette Owens, IHDF’s chief of staff, adds that “My529 offers the most flexibility and one of the most favorable fee structures.”

Other features to note about the IHDF DREAM Accounts:

• IHDF owns the accounts with students assigned as beneficiaries.
• Because the accounts are owned by IHDF, students do not need to list the funds when they apply for financial aid.
• If a student does not use the funds for college within four to five years, they revert to IHDF to be used for other Dreamers.
• There are no minimum contributions or balance requirements to balance to maintain accounts.

Any new strategy comes with opportunities to improve services. IHDF plans to use the data they have collected to improve technology and incentives. It is their hope to increase technology partners to leverage the accounts as scale as well as to refine and test individual milestone incentives to determine whether they lead to postsecondary success.

Read more from IHDF staff and students about the value of their Dream Accounts in their own words.