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SPRINGDALE -- More than 200 Marshallese children have received education savings accounts through a program that began last fall.

The Arkansas Treasurer's Office, the Arkansas Coalition of Marshallese, the University of Arkansas and other groups joined to offer between $100 and $200 to up to 200 children as seed money for 529 plans, a type of investment account that avoids income taxes for the money saved and earned. The accounts can help pay for an education for anyone with a Social Security or taxpayer number.

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Almost 90 families with 200 children filled every available spot in the program, and the treasurer has kicked in $5,000 to give the same help to 25 more kids starting this month, said Marcia Shobe, a social work professor at the university who helped organize the program.

"We're blessed that you brought that and made it available to us," Marshallese coalition founder Melisa Laelan said of the program. "Thank you always."

People from the Marshall Islands in the Pacific Ocean can live in work in the U.S. without visas in return for the U.S.'s military access to their territory. Many came to Northwest Arkansas for work, to join family members and access good schools. Census estimates for Northwest Arkansas show they're in poverty at twice the region's rate and get bachelor's degrees far less often than other ethnic and racial groups.

On top of that, dozens of U.S. nuclear weapons tests on the islands decades ago and other factors have left many islanders with health problems such as cancer and diabetes, heightening the need for bilingual islanders in health-related careers that require at least some education after high school.

Even bright Marshallese kids often graduate high school and stop their education, Laelan said.

The coalition and several other groups last year came together to help. The Winthrop Rockefeller Foundation in Little Rock kicked in a grant paying $100 into the participants' accounts. United Way Northwest Arkansas provided enough to double that amount if the participating families sign up for direct deposit and take part in financial classes on topics like budgeting or buying a car.

About three in four participants have gone to at least one class, Shobe said, and classes will continue this coming year on subjects like banking, storing important documents and financial aid for college. The Economic Opportunity Agency, a Springdale-based nonprofit, provides the curriculum.

Several dozen Marshallese parents and children gathered Friday evening at the coalition's office on Emma Avenue to give their thoughts on the program so far.

Most parents who spoke had lingering questions about how the accounts work -- what happens if they don't have bank accounts, for example. Emma Willis, who directs the Treasurer division administering tens of thousands of 529 accounts in the state, said they can still contribute to the plans from their paychecks.

Several expressed gratitude as well. Fressana Lawin said her 7-year-old son wants to be a police officer and her 11-year-old daughter wants to be a nurse. Through the program, she has saved between $300 and $400 in each child's 529 account so far.

"It's been a good idea, and it's going to benefit my kids," Lawin said.

Arkansas' 529s allow the holders to trim their taxes by working as a tax deduction: Every dollar put in, up to $5,000 a year per taxpayer, can be subtracted from a person's annual income that would be taxed. So someone who would be taxed on $40,000 of income, for example, would be taxed instead on $35,000, potentially saving a few hundred dollars.

The accounts' money is then invested, and any growth over time also avoids income taxes. It just needs to be spent on education, whether at a university, community college, technical school or, starting this year, on tuition from kindergarten up.

The accounts require a $25 starting deposit, deposits at least once a year after that and a small annual fee.

A review of the research into 529s' impact on families by the Washington, D.C.-based Brookings Institution concluded the plans can disproportionately benefit high-income earners but can also create a "college-going mindset" among low-income students.

Shobe and another social work professor, Yvette Murphy-Erby, are studying the program to measure what difference it makes for participants over time. This past year gives the baseline, so it's too soon to draw conclusions. But Shobe said she and others have seen a more future-oriented perspective among participants, some of whom for the first time can see their kids entering professional careers.

"And they want to make it happen," Shobe said.

NW News on 08/05/2018

Print Headline: Education savings program helps 200 Marshallese kids

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