Changes in demographic trends and family structure have impacted the financial landscape for today's families. Support from public and private programs can be the difference between living above or below the poverty line for at-risk families. CFRP studies the effectiveness and opportunities of these policies and programs.
States are required to incorporate the economic costs of raising children in periodic reviews of their child support guidelines. Most states use either the Engel or Rothbarth methods, but Texas relies on the U.S. Department of Agriculture (USDA) annual estimate of families’ expenditures. The USDA estimate, however, is an insufficient estimate of the cost of raising a child for a state as large and diverse as Texas, and it does not account for the costs associated with raising a child across two households. CFRP has developed the first Texas-specific model, the Texas Cost of Raising a Child (Texas CORC), as a more comprehensive and accurate approach for the state. The Texas CORC is modeled after the USDA estimate of expenditures on children, but it also incorporates Texas-specific data for housing and child care costs. In addition to being Texas-specific, the Texas CORC uniquely provides three cost estimates: the cost of raising children in single-parent families, married-parent families, and most importantly, across two households, reflecting the reality of many children whose parents have a child support order. The Texas CORC illuminates the limitations of current policies for policymakers and serves as a new model to better serve Texas families. More about the Cost of Raising a Child in Texas project.
Though many parents recognize the importance of sending their children to college, financing a college education has also become increasingly difficult. One approach to promoting college savings is through the use of asset-building strategies, which leverage policies and programs to encourage increased savings and asset ownership, often through the use of financial incentives. As part of their effort to strengthen college savings and access to higher education, RAISE Texas partnered with the Center for Public Policy Priorities (CPPP) and CFRP to pilot a college savings account program in elementary schools across the state. The pilot program pairs in-class financial literacy lessons with a school-based banking program that encourages students and their parents to open a savings account for college. CFRP is leading several evaluations to understand the role of financial incentives and outreach materials in the decision to open an account. In addition, CFRP is examining the barriers to saving for college, especially among low-income families. CFRP is also exploring the influence of school-based savings programs on student financial literacy and savings behavior.
In recent decades, college has become increasingly important to earnings potential, upward mobility, and a host of positive life outcomes. At the same time, college has also become increasingly expensive, fueling a rapid escalation in student loan debt and borrower default rates. In an effort to combat these trends, a group of Texas stakeholders convened to consider alternative methods of encouraging college savings among a broad population of Texans, especially those with a limited capacity to save. These discussions gave rise to the Child Support for College (CS4C) pilot program, an innovative collaboration between state-level partners, local nonprofits, private entities, and the Texas Office of the Attorney General-Child Support Division. The CS4C program applies the incentives of asset-building to lump sum transfers within the child support population, a largely untapped intersection that helps marry the twin goals of boosting college savings and promoting educational advancement and self-sufficiency among a traditionally lower-income population. CFRP evaluated the impact of this unique program and found that the CS4C program marked the beginning of college savings for most account openers. Although the dollar amount that many families deposited was relatively low, the mere act of opening an account provided psychological benefits for the account openers, who now believe their child will go to college, a vital element to college success. CFRP research also helped spur a rule change at the Texas State Securities Board that will help Texas families receive professional assistance when signing up for college savings programs.