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Growing CSAs on Tobacco Road

These days, when you hear the term “Tobacco Road,” it’s probably an announcer on ESPN hyping basketball in the traditional heartland of the Atlantic Coast Conference — North Carolina. But this week, two Tobacco Road towns, Durham and Reidsville — linked together in history as manufacturing centers for the once-giant American Tobacco — celebrated a new ballgame in North Carolina: creating matched college savings accounts for kids.

On Tuesday, in Reidsville, staff from the Reidsville Area Foundation, community partners and residents from the Parkview Village public housing community got together to hear about a new children’s savings account (CSA) initiative that will launch in the fall — the first of its kind in rural North Carolina and just the third CSA program in the US to serve a predominantly rural community.

The new CSA program will be part of the North Star Children’s Initiative, a place-based initiative that aims to prepare all young people in public housing in Reidsville for post-secondary success. In addition to creating stronger links between school and community, offering pre-school programming, an after-school center, summer camp and college campus visits, the North Star Initiative will open CSAs for all kindergarten students who live in the Reidsville Housing Authority’s Parkview Village neighborhood. Each account will receive a $100 initial deposit, along with a dollar-for-dollar match up to $250 per year for each year of elementary school. In addition to providing leadership and funding for all of the account incentives, the Reidsville Area Foundation is also planning to serve as the account custodian. At Tuesday’s meeting, Parkview Village resident Nicole Boswell noted that the CSAs are the “best thing” about the North Star Initiative and that “to think someone cares enough for my child (to provide an account) is a blessing.”

On Wednesday, in Durham, NC — just 60 miles down Tobacco Road from Reidsville — Partners for Youth Opportunity (PYO) and their financial institution partner, the Latino Community Credit Union (LCCU), celebrated 17 young savers who successfully met their savings goals as part of a new CSA program tied to paid internships. PYO is a multi-year, multi-component program that provides Durham youth with mentoring, employment and educational support. PYO’s goal is not to just help students make money, but also to teach students how to use money wisely though financial literacy and a new opportunity to have savings for college matched at the time of high school graduation.

LCCU helps to support the initiative by providing checking and savings accounts to all working PYO students. Silvia Rincón, LCCU's director of communications and service, noted that the credit union is pleased with the outcomes of its partnership with PYO. “We were able to provide financial services to more than 30 teenagers," said Rincón. "They have done an outstanding job managing their accounts and saving for their futures."

At Wednesday’s celebration, LCCU celebrated 17 students who began the savings program last summer and who met their internship savings goals. With the goal of making sure PYO students have at least $500 saved before entering college, each student was encouraged to save at least 20% of their earnings from their internship through PYO. For those that saved $325, LCCU committed to provide a $175 match, helping them to reach the $500 goal. On average, PYO students saved 40% of their stipends for a total of more than $10,000, all of which will go toward their secondary education.

PYO is proving that given the tools, teens who have been economically disadvantaged can take control of their finances and make impactful choices for their future.

The old bluesman from Durham, John Loudermilk, could not have said it better in his most famous tune, Tobacco Road:

“…with the help and the grace from above.
Save some money, get rich and old,
bring it back to Tobacco Road.”

Julie Wells is the Executive Director of Partners for Youth Opportunity.

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