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Taking It to the States:
Implementing Lifelong Learning Accounts on a Broader Scale
By Becky Klein-Collins
CAEL members and other Forum and News readers were
first introduced to the idea of Lifelong Learning Accounts
(LiLAs) in 2001. Since then, LiLAs have become a reality for
many working adults. CAEL has been demonstrating the feasibility
of LiLAs with an enrolled group of 350 workers in three locations
and four industry sectors. The project has helped confirm
many of our expectations, particularly regarding LiLAs’
appeal to both workers and employers. In addition, it has
offered lessons that are helping to inform larger LiLA projects
and proposed initiatives. These lessons have been important
since, in recent months, LiLAs have advanced beyond CAEL’s
own demonstration as leaders in several states have begun
to explore ways in which to offer LiLAs to greater numbers
of individuals and their employers.
The Basics of Lifelong Learning Accounts
Lifelong Learning Accounts (LiLAs), generally defined, are
employer-matched, portable individual savings accounts used
to finance education and training—something like a 401(k)
for adult education and training in which the worker’s
contributions to a LiLA account are matched by his or her
employer and, in some cases, third parties. The combined contributions
can then be used for education and training and related activities
for these incumbent workers.
What is appealing to policymakers about LiLAs is that they
help leverage employer and worker co-investment in education.
CAEL’s goal is to make LiLAs available to all employees
as part of standard employee compensation packages. This would
put learning opportunities within reach of every working adult.
It is important to note that LiLAs are intended to supplement,
not replace, existing employer-funded tuition programs. (For
additional descriptions of LiLAs and their features, please
see
http:// www.cael.org/lilas.htm.)
CAEL’s Multi-Year LiLA Demonstration Experience
With support from more than twenty different funders, CAEL
is currently carrying out a multiyear, multi-industry sector
demonstration of LiLAs in three sites. We are serving restaurant
employees in Chicago, public sector and manufacturing employees
in Northeast Indiana, and healthcare workers in San Francisco.
Altogether the project serves more than 350 enrolled individual
workers and 37 employers. In the demonstration, the project’s
funding allows matching dollars for both the employer and
worker contributions. For every $100 a worker contributes,
the employer contributes $100 and the project $200, essentially
quadrupling the worker’s contribution.
The participants enrolled in the demonstration have a diverse
demographic profile:
- Fourteen percent (14 percent) of all participants earn
less than $20,000 per year, 48 percent earn less than $30,000
per year, and 82 percent earn less than $40,000 per year.
- Twenty-eight percent (28 percent) of participants have
earned a high school diploma or less at the time of enrollment
in the program.
- Forty-two percent (42 percent) are over the age of 40.
- Thirty-seven percent (37 percent) are minorities and
18 percent do not speak English as their primary language.
- Fifty-five percent (55 percent) of participants are women.
From an early look at the data, we learned the following:
• LiLAs do leverage co-investment in education
and training. The individual participants are contributing
to their LiLAs and many have used the accumulated contributions
for education and training. As of June 30, 2005, the project
had leveraged a total of $295,578 in savings from individuals
and $295,578 in matching contributions from employers.
• Advising is valuable to individual participants.
An important part of the demonstration has been the individual
advising offered to the workers. Ninety-seven percent of participants
found their CAEL advisor to be somewhat or very helpful. Between
30 and 40 percent of the participants (depending on the sector)
found the advising process to be so helpful that they would
have been willing to pay for it themselves had it not been
offered for free through the program.
• Participants’ goals change with more
information. We have learned from the advisors some
important lessons about the participants’ goal-setting
process. As one advisor commented, “Participants often
begin with goals that allow them to ‘escape’ their
current jobs without true consideration of the realities they
face. Once they have spent more time exploring these realities,
participants focus on slower progress, often rooted in their
current employment experience.” We think that is an
interesting observation about the process of setting goals
and how these goals can easily change as more information
about education, training, and careers is known.
• LiLAs are showing positive impact.
Although it is too early to draw firm conclusions, there is
some early evidence that the LiLA participants have benefited
more from promotions than their non-LiLA co-workers. In addition,
there is some early evidence that employers are seeing a slight
increase in productivity from the LiLA participants.
• LiLAs change how employers value workforce
education and training. Three employers have added
educational benefits for their workers as a direct result
of the LiLA program. Other employers acknowledged that LiLAs
have helped to change their thinking about the value of employee
education and training.
• People like LiLAs. The vast majority
(88 percent- 99 percent, depending on the sector) of participants
were either “satisfied” or “very satisfied”
with the LiLA program. Eighty-seven percent of employers were
“very satisfied” or “somewhat satisfied”
with LiLAs.
• Sector matters. LiLAs have been
easier to implement in sectors like manufacturing and healthcare,
where education and training are more ingrained in the culture.
Sectors like restaurant/food service, on the other hand, offer
numerous challenges because of their high turnover and lack
of investment in human resources generally.
These lessons, as well as the overall experience in administering
the LiLA demonstration, are important for helping to advance
LiLAs on the national stage.
Going to Scale with State-based LiLA Initiatives
Since very early in the LiLA initiative, one of CAEL’s
main objectives has been to move LiLAs to the next step beyond
the ongoing three-site demonstration. One way we have done
this is by promoting a proposal for a federal LiLA demonstration.
We are also working with leaders in several states to develop
state-based LiLA initiatives with support from the Ford Foundation
and the Annie E. Casey Foundation. With key leadership from
Amy Sherman, CAEL’s Director of Public Policy, the most
recent activities with states include:
- In Maine, CAEL has been working with
a group of stakeholders called the LiLA Partnership. Members
include the Maine Department of Labor (DOL), the Compact
for Higher Education, community colleges, the university
system, and other stakeholders. As a result of the Partnership’s
work, the Maine DOL launched a LiLA demonstration with its
partners in 2005 to serve up to 350 workers with funding
from the Ford Foundation and the U.S. Department of Labor.
Widespread support for LiLAs across the state was evident
in Coastal Maine’s winning proposal to the U.S. Department
of Labor’s WIRED initiative (see sidebar.)
- In Illinois, CAEL has been working closely
with Senator Don Harmon, who introduced a bill this session
(SB2931) that would create a LiLA pilot in the healthcare
sector and provide state match dollars. The bill recently
passed out of the Senate unanimously and the House with
a wide margin of victory. CAEL has successfully enlisted
support for Illinois LiLAs from the City of Chicago’s
Mayor Richard Daley as well as many in the business community,
including the Business Leadership Group of CAEL’s
WorkforceChicago2.0 (a CEO-led effort to promote private
sector investment in employee learning and development).
This support was bolstered by a front page article in the
business section of the The Chicago
Tribune, highlighting a restaurant employee who used
his LiLA to successfully complete a community college program.
CAEL has received a small grant from the Illinois Department
of Commerce and Economic Opportunity to support continued
planning on the concept of LiLAs.
- In Missouri, LiLAs attracted the interest
of the Missouri Department of Economic Development and the
State Chamber of Commerce. Since Summer 2005, the state
has considered a plan for a state-based LiLA initiative
to be carried out in Kansas City in key growth sectors such
as manufacturing, healthcare, and IT – a plan that
may come to be with help from the U.S. DOL’s WIRED
initiative (see sidebar). The Chancellor of the Metro Community
Colleges System and the State Director of the Division of
Workforce Development are both committed to launching a
LiLA initiative in Kansas City.
CAEL is currently in discussion with leaders in several
other states—California, Indiana, Massachusetts, Michigan,
Minnesota, Pennsylvania, Washington, and Wisconsin—to
explore opportunities to bring LiLAs to their states.
CAEL is excited about the possibilities for LiLAs, particularly
as we learn more about their impact on our demonstration participants
and as more state leaders become aware of their ability to
leverage private investment in education and training for
adult workers. By creating a partnership between employers
and employees to co-invest in education and training, LiLAs
help to close the funding gap for working adults while providing
new resources to educational providers.
For more information about LiLAs and our state-based initiatives,
see our website at: http://www.cael.org/lilas.htm
or contact Amy Sherman, CAEL’s Director of Public Policy,
at 312-499-2635 or asherman@cael.org.
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