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A college savings program is under immediate threat

The Oregon Legislature’s short session began Feb. 3 in Salem. There is a program that is in danger if it doesn’t get the attention it needs there — the Oregon IDA Initiative.

You have probably never heard of it, but it’s a game changer for low-income Oregonians. This program offers Individual Development Accounts (IDAs). College Dreams, a local nonprofit, uses this program to help young people in Jackson and Josephine counties save for college or trade school.

What’s an Individual Development Account? Glad you asked. It’s a matched savings account, kind of like a 401(k), where the employee’s contributions are doubled, dollar for dollar. But with IDAs, the participant is someone with a low income and low assets. They need the money to build up an asset now, not when they turn 60. They need to buy a home, start a business, or get some training or a college degree. So they don’t just need their money doubled, they need it tripled or quadrupled. Participants are coached to build good saving habits and financial decision-making.

For 20 years, this has been one of Oregon’s best tools to improve financial prospects for individuals and families with low incomes. It’s flexible and supports unique approaches of local nonprofits who are working to build better futures in their communities — whether in Portland, Medford or the Warm Springs Indian Reservation. Participants open a savings account, are required to make monthly deposits and attend financial literacy classes. In turn, they are provided a 3-to-1 match on those saved dollars.

This program prepares our young people to be successful, tax-paying participants in our society and give back to their communities. IDA savers buy homes, start businesses, go to trade school or college, or meet other financial goals helping set them on a better path.

College Dreams works with over 1,400 students annually throughout Southern Oregon, and has been doing so for over 20 years. Youths have increased opportunities because of their work with College Dreams to thrive in school, careers and life. IDAs are one of the best tools to do this work, and have provided over $4 million in matched dollars to Southern Oregon youths in the last decade!

This money does not need to be repaid. With our coaching, it is deployed strategically to minimize student debt or avoid it altogether. College Dreams students go on to a variety of post-high school options including internships, apprenticeships, college or trade school, as well as business ownership and successful careers. IDAs are able to help with all of these futures.

Two recent graduates of the program sum it up nicely. “By being required to make monthly deposits to my IDA it helped create an understanding of how to better budget for monthly items.” And, “Participating in the IDA Initiative helped me understand the importance of investing my money in something worthwhile, in this case my education. It helped me develop saving goals and the match gave me initiative and rewards for my savings.”

Two other nonprofits work with IDAs in Southern Oregon: Neighborworks Umpqua in Roseburg and its local partner ACCESS. Together they have provided these matched savings accounts for education, housing and home repair to Rogue Valley residents over the past decade.

The IDA Initiative is a well-kept secret. It has made Oregon a national leader among innovative asset-building programs. And it has enjoyed strong bipartisan support because it is so different from public assistance. It helps people get off of public assistance. It should be quadrupling in size, just like the hard-earned money of its participant savers.

However, recent changes in federal tax law and IRS code mean the initiative, now funded by a state tax credit, is facing significant cuts, perhaps up to 40%. The Legislature must take action to keep this program at work helping students build better futures in Southern Oregon and allowing them to succeed and give back to the local economy.

State legislators will be acting to save IDAs during the short session ending March 8. For more information, visit www.oregonidainitiative.org or better yet, contact your legislator today and ask to keep the Oregon IDA Initiative whole. It takes less than five minutes with this link: prosperitynow.quorum.us/campaign/23191/

Kurt Hildebrand is executive director of College Dreams.