Growing Financial Assets for Foster Youths: Expanded Child Welfare Responsibilities, Policy Conflict and Caseworker Role Tension

Background & purpose: Each year about 24,000 young people exit foster care without achieving a permanent outcome, “aging out” to face elevated risks of homelessness, early parenthood, incarceration, unemployment, and homelessness (DHHS, 2014; Courtney & Heuring, 2005). Prior research has examined these youths’ experiences with employment and postsecondary education (Hook & Courtney, 2011), but little is known about the financial lives of these young people. This paper illuminates the role child welfare workers play in elevating the financial capability of foster youth transitioning to adulthood. 

Methods: Research participants included young people participating in an asset building program, Opportunity Passport^TM, directed at current and former foster youths. Researchers conducted semi-structured interviews with 38 participants and 8 staff members in four sites in three states. Sites were selected to capture diversity in ethnicity and urbanicity. Each participant’s one-on-one interview took place in person and lasted from 45 to 110 minutes. Interview questions probed program components, personal financial activity, and efforts to build financial assets. Interviews were recorded, transcribed, and analyzed using NVivo software. Researchers drew on prior research to develop themes that were elaborated in an iterative process involving coding interviews, revising categories, and recoding. 

Results: As young adult respondents transitioned to adult life, often facing a difficult financial world, caseworkers played a central role in program activities directed at building financial capability. These activities included education guidance, employment assistance, working to maximize program and government benefits, encouraging savings, and guiding spending. Findings suggest that in overseeing these cases, however, caseworkers faced challenges in dealing with the developmental features of young adult financial capability. These caseworkers also often indicated a lack of expertise to deal with issues of identity theft, credit, and debt.

Conclusions and Implications: The study findings suggest that the demands of older youths emerging from foster care require professional financial expertise that goes beyond the traditional role of the child welfare caseworker. Caseworkers who address financial capability in young adults face uncertainty in their roles, and indeed indicated some tension, if not conflict, regarding their responsibility in enhancing financial capability. For example, most states cap the amount of savings that young people may accumulate while in foster care, a policy that may inhibit saving behavior. Some caseworkers also expressed hesitancy in guiding young people from foster care into other public aid systems, for fear of encouraging or perpetuating dependency on state assistance, even if other sources of income were unavailable. Additional research is needed to expand our understanding of foster youths’ financial lives and the role that social workers should play in expanding financial capability.