economy
Before there were Trump Accounts, SEED OK gave some newborns $1,000
Some state-sponsored programs paved the way for Trump Accounts, the new tax-deferred investing accounts for children.
TL;DR
- SEED OK, a 2007 Oklahoma program, provided some newborns with a $1,000 grant into a 529 college savings account.
- A 2021 analysis found SEED OK participants had positive outcomes, including asset accumulation, higher educational expectations, and increased college engagement.
- Lower-income children specifically benefited, with the CDA increasing the likelihood of financially vulnerable households saving for college.
- SEED OK is highlighted as a key experiment behind early wealth-building ideas, including the new Trump Accounts.
- In the SEED OK treatment group, 100% of children still held assets after 18 years, with significantly higher wealth building and college focus compared to a control group.
- The program increased parents' educational expectations, leading to an estimated college enrollment rate closer to 64% compared to Oklahoma's typical 40%.
- Monica Rachelle's son, Hayden, participated in SEED OK, and the account served as a reminder of college possibilities, contributing to his acceptance into multiple four-year colleges.
- Similar programs in Maine, Pennsylvania, and California also show that dedicated savings accounts change parents' outlooks and lead to children pursuing higher education.
- Trump Accounts, launching July 4, will offer a $1,000 initial deposit from the U.S. Treasury for babies born between 2025-2028, with further contributions possible.
- Advocates believe Trump Accounts can have long-term benefits similar to state-based programs, with Michael Dell citing improved outcomes like higher graduation rates and better mental health.
- The Dell's committed $6.25 billion to provide an additional $250 seed deposit for children born between 2016 and 2024.