Trump Accounts Program Shows Low Enrollment Among Eligible Children

Earlier this month, The New York Times reported that White House and Treasury officials have discussed allowing billionaires to donate shares of stock directly into the accounts. The accounts were created with an initial $1,000 investment for most American children.

Brad Gerstner stated that all funds would remain in a diversified index fund, the only option the law currently allows. The program already authorizes employer matches and philanthropic contributions, but lacks the administrative infrastructure to handle stock donations at scale.

The current design requires parents to file a tax form or navigate a government website to activate an account. Officials have the authority to implement automatic enrollment using Social Security numbers, but have not done so. A similar children's savings program in Maine reached only 40 percent participation under an opt-in system despite a multimillion-dollar recruitment effort.

Participation reached 100 percent after the state switched to automatic enrollment on an opt-out basis. A long-term randomized trial conducted by the Center for Social Development at Washington University in St. Louis found that automatic enrollment with an initial $1,000 deposit resulted in 99.9 percent participation.

After 17 years, the initial deposit grew to approximately $2,600 through investment returns, and participants held an average of roughly $5,000 in total college assets.

If wealthy donors want to contribute, a pooled fund could convert donations into diversified investments across all children's accounts. The enrollment gap will not correct itself without changes to the current system.