- May 2014
- Vol. 15, No. 5
Financial Challenges Faced by Transitioning Youth
Noting the financial barriers to success faced by youth transitioning out of foster care, the National Foster Care Coalition formed a working group in 2008 to examine barriers and explore strategies for overcoming them. In July 2013, the Coalition—in partnership with youth formerly in foster care, nonprofit partners, and the Consumer Financial Protection Bureau (CFPB)—held a listening session to hear from youth. A report released by the Coalition outlines the scope of the problem, youth comments at the session, policies and practices for addressing the issue, and online resource guides.
At the session, youth offered their firsthand experiences with credit fraud, identity theft, and struggles with transitioning to financial independence. Youth suggested that training on financial literacy be provided not just to youth, but also to caseworkers and other professionals working with youth leaving foster care.
While the Child and Family Services Improvement Act of 2011 requires child welfare agencies to provide youth with a copy of their credit reports annually, in addition to an explanation of its contents and guidance on addressing any issues, the Coalition's report contends that more must be done. Policy and practice efforts to address the issue are also highlighted in the report:
- ChildFocus is working to assist States in implementing financial provisions of the Child and Family Services Improvement Act of 2011. ChildFocus also has partnered with Credit Builders Alliance in the State of Maryland to build some models on credit education and credit building.
- The American Bar Association Center on Children and the Law is tracking States enacting legislation on the issue and has produced the report Preparation of Foster Youth for Financial Management and Related Skills about requirements around financial protection and education in 20 States.
A Listening Session: Youth in Foster Care & Financial Challenges is available here:
http://www.nationalfostercare.org/uploads/8/7/9/7/8797896/a_listening_session--youth_in_foster_care__financial_challenges.pdf (1 MB)
Children's Bureau Express featured a CFPB report released in September, Financial Empowerment Training for Social Service Programs: A Scan of Community-Based Initiatives, in the article "Financial Empowerment Training," (December 2013):