The LiLA Program Lifelong Learning Accounts

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Lifelong Learning Accounts
MaturityWorks Alliance February 19, 2008
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What is CAEL?

• CAEL is the Council 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

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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

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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)

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Aging Population
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Aging Workforce

• According to the Bureau of Labor Statistics, the
  percent of workers aged 55 and older in the
  nations workforce is increasing
• 13 in 2000
• 17 by 2010
• 19 by 2050

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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.

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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

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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.

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Race and Education

• Bachelors degrees at age 55 and older
• 26 of Whites
• 34 of Asian Americans
• 14 of African Americans
• 11 of Hispanics

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Education and Income

• Median Income at age 65 and over
• With Bachelors degree 25,700
• Without Bachelors degree 15,000

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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.
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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

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

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Key Characteristics of LiLAs

• Sponsored by Employer
• Employer Matched
• Optional 3rd Party Matches
• Universal

• Voluntary Participation
• Broad Use of Funds
• Portable (Employee Owned)
• Career Education Advising

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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

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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

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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

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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

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Preliminary Outcomes

• Co-investment strategy works
• As of September 2006, leveraged 219,404 from
  workers and 200,512 from employers.
• Worker contribution matched 11 by employers up
  to 500. Project matched total contributions.
• Average monthly contribution of LiLA participants
  (excluding those who dropped out) 33.82

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Preliminary Outcomes

• 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.

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Preliminary Outcomes

• 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.

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Preliminary Outcomes

• 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

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Preliminary Outcomes

• 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.

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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

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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

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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

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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 Mayors
  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

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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

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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

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SF Demo Employer Marketing

• Whats 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

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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

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SF Demo Worker Marketing

• Whats 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?

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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

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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)

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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

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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

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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, Id rather be 50
  with my degree than without it! Its been a
  great motivator for me, making it easy for me to
  think about how I can improve my career path.

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Contact Information
Amy Sherman Associate VP for Policy and Strategic
Alliances CAEL [phone] asherman_at_cael.org J
odie Stein LiLA Supervisor JVS (415)
782-6250 jstein_at_jvs.org