# The Earn to Learn Act: A Plain Language Explanation

The Earn to Learn Act creates a new federal program that helps low-income students save money for college or career training by matching their savings dollar-for-dollar. Here's how it works in practice: if a student and their family save $100 toward education costs, the government program adds $8 for every additional dollar they save, up to a certain limit. This matching money comes from federal grants given to states and nonprofit organizations that run the program.

To participate, students must be from low-income families, get admitted to a college or technical school, and complete a financial education course. Once they're enrolled, they open a special savings account and can deposit money whenever they want. The program also provides ongoing financial coaching to help students learn budgeting, manage debt, understand credit, and prepare for college life. The goal is straightforward: give students a financial cushion that reduces how much they need to borrow in student loans, while teaching them healthy money habits they'll use for life.

The program is being set up as a demonstration project, meaning it will run in select states and communities for several years so the government can study what works best. States and nonprofits that want to run the program must match every federal dollar with their own funding from private donors or other sources. Students who participate won't lose their eligibility for other federal aid like Pell Grants, and the money they save won't count against them when applying for financial aid. The program is authorized to receive up to $100 million per year for five years, though Congress would need to actually approve that spending.

Earn to Learn Act

Lee, Susie

Earn to Learn Act This bill directs the Department of Education (ED) to establish a postsecondary education match savings account demonstration grant program, through which ED must award competitive grants to states and nonprofit organizations to provide certain low-income students with postsecondary education match savings accounts (e.g., 529 plans). Further, ED must (1) develop and make available to grant recipients certain tools, including a training platform, a program guide, an online data portal, and certain trainings (e.g., on workforce readiness); (2) ensure that participation in the grant program does not affect student eligibility for Federal Pell Grants; and (3) provide technical assistance. Grant recipients must use funds to (1) select eligible students to participate in the grant program, (2) provide selected students with financial literacy education, (3) establish a postsecondary education match savings account for each participating student and allow such students and their families to deposit funds in their account to save for attendance at an institution of higher education or an area career and technical education school, and (4) reserve matching funds for participating students. Additionally, grant recipients must ensure that participating students are entitled to withdraw funds from their accounts under certain circumstances.