Source: Fortune
Summary
The Trump Accounts program, aimed at providing $1,000 investment accounts for American children, has a significant enrollment gap, with only 6.6 million out of 73 million eligible children enrolled. The program’s design requires parents to opt-in, which has led to low participation rates, disproportionately affecting low-income families. Experts suggest automatic enrollment, which has been successful in other programs, could solve the issue. Meanwhile, a proposal to allow billionaires to donate stock directly to Trump Accounts has sparked debate, but the enrollment gap remains the more pressing concern.
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The numbers tell one story.
The Trump Accounts program has a glaring enrollment gap, with 67 million children without an account. The opt-in design is a major hurdle, as seen in similar programs like Maine’s children’s savings initiative. Automatic enrollment, as studied by the Center for Social Development, has been shown to be highly effective. The authority for automatic enrollment exists, but the willingness to use it is lacking. The stock donation debate is a sideshow compared to the real issue: getting more children enrolled.
As the program’s lead advocate, Brad Gerstner, clarifies that funds would remain in a diversified index fund, the immediate investment risk to children is smaller than initially thought. However, the lack of administrative infrastructure to handle stock donations is a concern.
The real question is: what will it take to get the remaining 67 million children enrolled?
Author: Evan Null
