An Educator’s Perspective on the American Opportunity Accounts Act

During my five-year tenure as a 7th and 8th grade teacher in the Bronx, I witnessed the lightheartedness of my students, and their consistent display of humor and fun. However, I noticed their upbeat demeanors turned strikingly somber when, while on college tours, they talked about their futures. Through speaking with many of the students, I found that their uneasiness derived from the rising costs of higher education. I heard phrases like, “my parents can’t afford for me to go to college,” and “people like me can’t afford college.” We were standing on a college campus, but for many of my students, college could not have been further away.

The American Opportunity Accounts Act, reintroduced late last month by Senator Cory Booker (D-NJ) and Representative Ayanna Pressley (D-MA-7), has the potential to alleviate this hopelessness for many low- and moderate-income students by building on the Baby Bonds idea developed by economists Darrick Hamilton and William Darity. This bill would not only ensure that all children have a savings account in their name as soon as they are born, but also that our most vulnerable children will have the necessary resources to invest in their future aspirations when the time comes.

Specifically, the American Opportunity Accounts Act would provide every newborn child a $1,000 savings account run by the U.S. Department of the Treasury. From then until the child turns 18, their accounts would be boosted with yearly deposits of up to $2,000, depending on the financial picture of the child’s family. Since children from lower-income families would receive higher annual deposits, the American Opportunity Accounts Act would provide low-income children with as much as $34,000 in investments by the time they are 18. Including interest, that $34,000 would grow to more than $45,000 which could be used by the child to invest in wealth-building opportunities such as higher education or homeownership.

While no one bill can fully address the challenges of rising economic inequality and a growing racial wealth divide, Senator Booker and Representative Pressley’s American Opportunity Accounts Act is an important and bold first step in the right direction. More importantly, the American Opportunity Accounts Act will make real investments in the promise of children from low- and moderate-income families.

Contact your legislators to co-sponsor the American Opportunity Accounts Act—help move this critical legislation for hardworking families across the nation!

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