Nebraska Legislature Approves Universal, At-Birth CDA Policy

Community Engagement; Public Health; Research

Nebraska’s legislature today unanimously approved a universal Child Development Account (CDA) policy that will cover every resident born in the state on or after January 1, 2020.

Championed by Nebraska Treasurer John Murante and a bipartisan coalition of senators, the policy features automatic, universal enrollment in the new Meadowlark Program, which will provide a Nebraska 529 college savings account with a deposit for all newborn Cornhuskers.

Approximately 26,600 Nebraskans are born each year, and the deposits for these infants will grow until they later access the funds for college, trade school, or other postsecondary education in Nebraska. If not spent before the recipient turns 30, earmarked Meadowlark assets will be used for future Nebraska children.

Funded equally through private contributions and state sources (not general fund dollars), Meadowlark is designed to broaden access to postsecondary education. “State legislators are creating a structure and paving the way for all Nebraska children to succeed, perhaps particularly those from disadvantaged families,” said Margaret Clancy, policy director for the Center for Social Development (CSD) at Washington University’s Brown School. Clancy advised Treasurer Murante on desirable CDA policy features, provided research results from the SEED for Oklahoma Kids CDA experiment, and testified on the Meadowlark provisions.

The approved legislation, which Gov. Pete Ricketts is expected to sign, includes several other noteworthy provisions for Nebraska’s 529 plan. The Employer Matching Contribution Incentive Program offers incentives for matching workers’ contributions, and the Low-Income Matching Scholarship Program allows families with income below 200% of the federal poverty level to apply for $2 for every $1 contributed. Families making between 200% and 250% of the poverty level could receive a dollar-for-dollar match.

Provisions of a pending bill would shield Nebraska 529 assets from state determinations of student aid eligibility. This bill also would protect employers’ 529 plan-matching contributions from state decisions about eligibility for need-based state benefits.

In comments to the Unicameral Update, Sen. Lou Ann Linehan, sponsor of the Meadowlark provisions, said, “529 accounts are in wide use among the wealthy but not among low-income Nebraskans.” 

Linehan sees Meadowlark as a way to “give more Nebraska children hope for their future.”

“Nebraska’s legislation provides enormous potential to engage corporations, nonprofits, educators, communities, and state resident families in building assets for children’s education,” Clancy said. Nebraska is one of several states that she and others at CSD have advised on CDA policy. Statewide CDAs have been implemented in Pennsylvania, Maine, Nevada, Rhode Island, Connecticut, and Massachusetts, and legislation is pending in several other states, including Illinois and California.