Financial Help & Resources for Foster Youth “Aging Out”

It’s your 18^th birthday, but instead of getting presents and cake, you’re told to pack your bags and get out of the house.

As depressing as that sounds, that is the reality for 23,000 kids who age out of the foster care system every year.

It’s called “aging out,” which means the government no longer has jurisdiction over a child. Once foster children reach a certain age, they no longer qualify for government benefits – and the loss of those benefits aren’t all that can make this the start of an extremely difficult adulthood.

Children placed in the foster care system are often the victims of abuse, neglect or abandonment. They age out because the system never found someone to adopt them so they’re cycled back to abandonment. Too often, they’re not ready.

“No child when they turn 18 is an adult,” said Shannon Harding, youth services assistant director with Embrace Families, the lead child welfare agency in Central Florida. “Unfortunately, our children have been under the guidance of so many people in their lives – case managers, therapists, a ton of people supporting them – and they want nothing more than to just be left alone. So, they push us away, and we do what we can to prepare them for that 18^th birthday. Oftentimes, they don’t have realistic plans, as much as we prepare for them.”

Realistic plans, of course, include finding housing, a job and continuing their education, all of which are complicated by their background.

Foster Care “Aging Out” Statistics

It’s important for foster care children to have a plan in place because the odds are stacked against them. Youth who age out of foster care belong to one of most vulnerable and at-risk groups in America.

• 1-in-4 won’t graduate from high school or be able to pass their GED
• 20% will become instantly homeless
• 60% will be convicted of a crime
• 50% of foster children have no income within their first four years of aging out, and those who do have an average annual income of $7,500
• Between 3% and 10.8% of foster care alumni have a bachelor’s degree.

Extended Foster Care

Historically, foster care ended at age 18. Now, every state except Oklahoma offers some services beyond that age and offer some benefits until age 23 due to the Family First Prevention Services Act of 2018. Due to the coronavirus pandemic, Congress allowed temporary expansion of services up to age 26.

Because so many leave foster care poorly prepared to pursue higher education or begin a career without adult guidance, extended foster care allows them to remain or re-enter care after turning 18, giving the child welfare system more time to help them make the transition.

Extended foster care resources vary from state to state but are designed to help young adults meet a variety of needs, such as:

• Academic: applying for college, getting a tutor or securing financial aid.
• Employment: finding jobs, writing resumes, submitting applications and understanding employee benefits.
• Health care: enrolling in Medicaid and selecting a health-care power-of-attorney.
• Home management: understanding meal planning, housekeeping and house maintenance.
• Financial: developing a budget, opening a credit card and protecting a credit score.
• Life skills: obtaining a driver’s license.

A 2019 study by Child Trends indicates that those in extended care compared with those who exited foster care at 18 are:

• Three times more likely to be enrolled in school
• 4 times more likely to be receiving educational aid
• Three times less likely to be disconnected from school and work.

Toolkits Will Help Transition

The U.S. Department of Education provides a Foster Care Transition Tool Kit. Like many government documents, it’s very detailed and difficult for a teenager to comprehend. Federal law requires child welfare agencies to begin working with foster youth at age 14 to develop plans for transition into adulthood.

The plan is supposed to be completed 90 days before they age out of foster care. It’s hard to believe anyone that young can grasp how Medicaid works, what a credit score is, how to balance a budget or what they will need to sign a lease.

Foster Club has their own transition tool kit with much more direct guidelines. The tool kit is meant for foster youth, but these principles could be applied to anyone moving out of the house for the first time. At the minimum, you’ll need a plan in place for finances, housing, health care, your education and career.

Here are some recommendations that any child leaving home could learn from.

Financial Considerations for Foster Children

Get a bank account with a checking and a savings account before you move out. Have a source of income and list all the types of aid you might qualify for such as social security, housing support, food stamps, financial aid for college, etc.

Next, create a budget listing your expenses (rent, food, utilities, transportation, clothing, medical care), and how much money you’ll need  to cover them. Remember to put some money away into your savings account, so you can start building an emergency fund to cover unexpected expenses.

Those living on their own the first time often have to learn the hard way that there are consequences like overdraft fees to spending money they don’t have, Harding said.

“If you buy this hamburger for $3 and you only have $1.50 in your account, you’re going to end up paying $25 for a hamburger,” Harding said. “Some of those lived experiences are what happens to them when they age out.”

Housing

Calculate how much it would cost to rent your own space. Living with roommates can cut the cost of living in half. The total cost of housing should never exceed 35% of your monthly income. The John F. Chafee Foster Care Independence Program provides housing vouchers for foster youth making the transition to independence. Also, look into transitional housing programs offered by your state.

Federal law provides housing assistance to foster youth transitioning to independence. Youth also may be eligible for state-administered transitional housing programs. Forms of assistance from the U.S. Department of Housing and Urban Development include a subsidized unit in a building owned and managed by the housing program, vouchers providing monthly rental assistance, or a stipend for living expenses. Hud-approved housing counselors also may provide assistance.

In a housing crisis, homeless and runaway youth can text SHELTER and their ZIP code to the phone number 99000 from anywhere in the nation and receive a response from a local shelter. ShelterListings.org offers a complete list of shelters in each state.

Health Care

Youth formerly in foster care are eligible for Medicaid up to age 26, thanks to the Affordable Care Act. You are eligible for full Medicaid coverage regardless of your income or whether your state declined to expand Medicaid coverage. However, you are only eligible for Medicaid in the state in which you age out of foster care. If you move to another state, they are not required to give you coverage.

To learn about each state’s policies, contact the State Medicaid Office. Those dealing with a crisis or emotional issues may text the National Alliance on Mental Illness (NAMI) Crisis Text Line: 741741 or call 1-800-950-6264 to speak to a trained crisis counselor. In addition, the Substance Abuse and Mental Health Services Administration operates a national helpline, 1-800-662-4357, which provides a free, confidential, around-the-clock information service and treatment referrals in English and Spanish.

Education and Career

It’s vital for those exiting foster care to work toward earning a high school diploma or GED if they haven’t already done so. There are a number of resources available to help pay for college, so take full advantage of those. If you live in one of the 24 states that offer tuition waivers for foster youth, you won’t pay a dime for tuition. Another 11 states offer grants or scholarships as a form of tuition assistance.

Apply for financial aid by filling out a Free Application for Student Aid (FAFSA), and you should qualify for a Federal Pell Grant worth up to $6,495. The John H. Chafee Foster Care Independence Program can help you get up to $9,000 with an Educational and Training Voucher (ETV) from your state. Foster Care to Success can link you up with scholarships specifically for foster youth, and there are a number of other scholarships and grants for college students.

College isn’t for everyone. Apprenticeship programs can help you learn a craft and make a career out of it. ETVs can also provide money for career school or training.

How Foster Parents Can Help Transitioning Foster Care Youth

Child welfare agencies like Embrace Families are important, but foster parents are vital to help youths transition to adulthood with the safety nets and support networks their peers enjoy.

• Train youth to make decisions. Youth in foster care often have no say about big decisions that affect their lives. Give youth plenty of opportunities to make decisions and learn from the results.
• Set high expectations. Give them positive messages about what’s possible for them. Talk about their going to college or starting their own business.
• Don’t delay. Start preparing them for adulthood early. Introduce important concepts like saving money for long-term goals while they’re young.
• Gradually give them responsibilities. Involve them in setting rules and establishing appropriate consequences for their behavior. As they show they’re able, help them learn and practice adult life skills.

Get Help Transitioning into Financial Adulthood

Let’s face it: Adulthood isn’t easy even if your upbringing has been smooth and stable. Those who’ve aged out of foster care may not know people they can trust to give them sound financial advice.

That’s where InCharge Debt Solutions can provide valuable help. InCharge isn’t only there for people who have gotten into debt trouble. Its free credit counseling services can provide advice about managing your finances that can keep you out of that trouble. You can visit a credit counselor in person or choose online credit counseling if that’s better for you.

So, even if your 18^th birthday wasn’t what you hoped it would be, with the right help, you can have a bright future.