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Lifelong Learning Accounts

Lifelong Learning Accounts. MaturityWorks Alliance February 19, 2008. What is CAEL?. CAEL is the C ouncil for A dult and E xperiential L earning A 501(c)3 non-profit, international organization with 32+ years of experience

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Lifelong Learning Accounts

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  1. Lifelong Learning Accounts MaturityWorks Alliance February 19, 2008

  2. What is CAEL? • CAEL is theCouncil for Adult and Experiential Learning • A 501(c)3 non-profit, international organization with 32+ years of experience • Headquartered in Chicago, IL with offices in Philadelphia, PA; Denver, CO; New York, NY; and Norwalk, CT • A national workforce intermediary dedicated to removing barriers to adult learning

  3. What is JVS? • JVS is Jewish Vocational Service • JVS builds the skills needed to succeed in today's workplace. We assist individuals to achieve self-sufficiency, and help businesses fulfill their employment goals • JVS is a non-sectarian, 501(c)(3) non-profit organization founded in 1973, serving the San Francisco Bay Area

  4. Education Gap Estimates suggest that by 2014, the U.S. labor force will be short 9 million college educated workers, including 3 million Associate Degree holders. As cited by Employment and Training Administration, Adults in Higher Education: Barriers to Success and Strategies to Improve Results (March 2007)

  5. Aging Population

  6. Aging Workforce According to the Bureau of Labor Statistics, the percent of workers aged 55 and older in the nation’s workforce is increasing: • 13% in 2000 • 17% by 2010 • 19% by 2050

  7. Age and Education • U.S. News recently reported that the number of college students over age 40 has grown by 20 percent in the last decade.

  8. Redefining “Retirement” • 2006 Merrill Lynch survey of Americans between ages 25-70: • 71% plan to work • 66% of those who want to work want to pursue new line of work • In 2003 AARP survey of pre-retirees: • 68% plan to work during retirement. • Primary reason to work = $

  9. Education Gap • Bachelor Degree or higher: • 30% aged 55 to 59 • 25% aged 60 to 69 • 18% aged 70 and older • Associate Degree • 9 % aged 55 to 59 • 7% aged 60 to 69 • 5% aged 70 and older American Council on Higher Education. 2007. Framing the New Terrain: Older Adults & Higher Education.

  10. Race and Education • Bachelor’s degrees at age 55 and older: • 26% of Whites • 34% of Asian Americans • 14% of African Americans • 11% of Hispanics

  11. Education and Income • Median Income at age 65 and over • With Bachelor’s degree: $25,700 • Without Bachelor’s degree: $15,000

  12. Financing Gap • Tuition and fees between 1996 and 2006 increased annually • 5.5 percent at private four-year colleges and universities • 7 percent public four-year colleges and universities, and • 4.5 percent at public two-year colleges. College Board. 2006. Trends in college pricing. Trends in higher education series.

  13. Financing Gap • A Portland Community College Task Force on Aging: • Six in 10 older adults said that financing is an impediment to achieving educational goals

  14. Who Pays for Adult Learning? Informal Analysis by Ford Foundation (2003)

  15. What are LiLAs? • Lifelong Learning Accounts (LiLAs) • Individual education accounts • Matched by the employer • Finance lifelong learning • Similar to 401(k)s … • but for education and training

  16. Sponsored by Employer Employer Matched Optional 3rd Party Matches Universal Voluntary Participation Broad Use of Funds Portable (Employee Owned) Career & Education Advising Key Characteristics of LiLAs

  17. LiLA Demonstration Sites • CAEL Demonstration (late 2001 – summer 2007) • Chicago - restaurant industry; 127 employees • Northeast Indiana - 79 manufacturing employees; 76 public sector employees • San Francisco (JVS) – healthcare; 77 employees

  18. Overview of Participants: Employers • 37 employers • 4 sectors: healthcare, restaurant, manufacturing, and public sector • Size varies from 3 to 5,500 workers • 65% have fewer than 110 employees

  19. What Appeals to Employers? • Increased recruitment and retention of employees • Affordable addition to existing benefit package • Career & education advising for frontline staff • Setting a cap on monthly and total annual LiLA contributions • Being part of national initiative to increase access to education

  20. Overview of Participants: Employees • 35% earn less than $30,000 per year; 70% earn less than $40,000 per year • 46% lacked any postsecondary credential • 43% are over age 40 • 38% are minorities • 56% are female

  21. PreliminaryOutcomes Co-investment strategy works • As of September 2006, leveraged $219,404 from workers and $200,512 from employers. • Worker contribution matched 1:1 by employers up to $500. Project matched total contributions. • Average monthly contribution of LiLA participants (excluding those who dropped out) = $33.82

  22. PreliminaryOutcomes Participants use LiLAs to advance and/or retool • 70% reported educational goals related to • current job, • promotion with the same employer, or • related work with the same employer or industry. • More often reported seeing a relationship between their studies and a future job as opposed to current job.

  23. PreliminaryOutcomes LiLAs provide an incentive to pursue education and training • Approximately half (44 to 58%, depending on the sector) of LiLA participants had not been planning to enroll in education or training before the start of the LiLA program • 84% of participants who made regular or significant contributions to their LiLAs used their LiLA for at least one class. • Across all sites, the average LiLA expenditure per participant was $2,003.

  24. PreliminaryOutcomes Participants valued advising services • 97% of participants report that they found their CAEL advisor to be helpful • 30-40% of participants willing to pay for advising out-of-pocket

  25. PreliminaryOutcomes High level of program satisfaction • 88 to 90% of participants were “satisfied” or “very satisfied.” • 87% reported that they would continue participation even if the program included only employer match funds. • 90% of responding employers reported that they were “very” or “somewhat” satisfied.

  26. SF Demo – Complement to Experience Wave • The Experience Wave • Supported by The Atlantic Philanthropies • Advances federal and state policies to promote work, civic engagement, lifelong learning for older adults • LiLAs are one component of Experience Wave • SF demo

  27. SF Demo - 2007 - 2010 • Employers match up to $600, third-party matches up to $300 per year for two years • Workers can turn their $600 savings into $1500 per year • Workers have two years to match and take classes, plus an additional year to take classes

  28. SF Demo – Goals • 150 slots – 2 sectors • Focus on 55+ workers – 40% of total enrolled • Low-income/minority – 50% of 55+ workers and focus for all ages

  29. SF Demo – Advisory Committee • Committee includes representatives of AARP, Civic Ventures, NCOA, Experience Corps, CVS Caremark, State and City educational institutions, LiLA employers, organized labor, and the Mayor’s Office • Goals • Support constituency building efforts for state and federal policy initiatives • Forum for networking and information sharing • Provide expertise and referrals to the LiLA demo in engaging employers and workers 55+

  30. SF Demo - Sectors • Healthcare: 85 slots filled • Employers include mental health facility, senior services agency, and state university medical campus • Public/Education: 65 slots pending

  31. SF Demo – Employer Marketing • Leveraged JVS’ existing employer relationships • Flyer tailored to each sector and collateral with employer/employee “success” quotes • 55+ messaging – research shows loss of skilled workforce as this group retires in next 10 years • SF is an aging city – increased demand for healthcare services • Employer meetings to assess interest

  32. SF Demo – Employer Marketing • What’s Worked • Connection with JVS • Business pitch • 55+ focus but allows all ages • Challenges • Balancing 55+ focus • Bureaucratic decision making • Union bargaining timelines • Generous retirement packages

  33. SF Demo – Worker Marketing • Brochure and customized employer flyers (with translation where appropriate) • Full-sized color posters with “take-away” • Internal email blasts, newsletters • Paycheck stuffers and direct mailings • Supervisors encouraged to talk to their staff directly • Outreach sessions at workplace • Past participant speakers and “success” quotes • Referral stipends

  34. SF Demo – Worker Marketing • What’s Worked • Outreach sessions • Word of mouth • Past participant involvement • Direct encouragement from supervisors • Challenges • Balancing 55+ marketing • Cultural - reaching non-English speakers (55+) • Timing – economy, election insecurity • Suggestions?

  35. LiLA Initiatives Moving Forward • Federal • National Lifelong Learning Accounts Act of 2007 (S.26) • Lifelong Learning Accounts Act of 2007 (H.R. 2901) • State and Regional • State-based program (Maine) • Mature Worker pilot (San Francisco) • Legislative initiatives • Illinois • Hawaii • WIRED – US Department of Labor • Coastal Maine • Kansas City region • Planning grant for NYC LiLA demonstration • Planning grant for Michigan LiLA initiative

  36. Federal LiLA Bills • January 4, 2007 - S. 26 introduced by Senators Maria Cantwell (D-WA) and Olympia Snowe (R-ME) • June 28, 2007 - H.R. 2901 introduced by Rep. Thomas Allen (D-ME)

  37. Features of the Federal Bills • Amend the IRC to establish a LiLA demonstration program for up to 200,000 workers in up to10 states • Participating states selected in a competitive process • Tax credit equal to the amount contributed into a LiLA up to $500 per tax year (refundable credit and additional deduction for individuals in the House bill) • Distributions excluded from gross income Targets tax incentives to lower and middle-income earners • Employer option to match workers’ contributions; tax credits of up to $500/tax year

  38. What Can You Do to Support LiLAs? • Federal • Letters of support • Spread the word about LiLAs • State • Get involved in local LiLA initiatives • Work with CAEL to bring LiLAs to your community

  39. LiLA Participants say… “LiLAs gave me the confidence to move toward my degree. I hesitated at first because I thought I would be 50 years old before I finished my degree. But then I thought, “I’d rather be 50 with my degree than without it! It’s been a great motivator for me, making it easy for me to think about how I can improve my career path.”

  40. Contact Information Amy Sherman Associate VP for Policy and Strategic Alliances CAEL (312) 499-2635 asherman@cael.org Jodie Stein LiLA Supervisor JVS (415) 782-6250 jstein@jvs.org

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