Helping Foster Youth Achieve Independence in Adulthood

Executive Summary and Introduction

• Former foster youth are more likely than their peers to succumb to poor life outcomes from homelessness to incarceration to being the victim of trafficking.
• Each year, an estimated 23,000 youth age out of foster care without a permanent family.
• The federal government provides substantial funding to support state child welfare systems and offers a range of benefits to youth aging out of foster care, including housing, education and job training vouchers, subsidized health care, and others; however, despite these available benefits, too many former foster youth end up on the streets.
• State and local child welfare agencies routinely apply for and take foster children’s Social Security disability and survivor benefits to pay for their care. Congress should protect foster children’s owed federal benefits and ensure that those funds are used to support services or items beyond those which the agency is already required to pay for, or to help foster youth achieve independence when they become adults. Congress could also give states flexibility to use federal funding that supports child welfare under Title IV-E of the Social Security Act to provide cash benefits to foster youth to pay for life expenses to support the transition to independence.
• The next White House should direct federal agencies to improve statistical collectionand reporting about foster children’s experiences and to monitor states’ compliance with the Every Student Succeeds Act.

Children in foster care are among the most vulnerable members of society. According to federal data, 391,000 children were in foster care at the end of fiscal year 2021. Child welfare systems supported more than 600,000 American children that year. 

Children placed in foster care face serious challenges. From the circumstances that resulted in their placement in care, to the instability of growing up without the support of a traditional family, foster children often face uncertain futures. This is particularly true for children who age out of the child welfare system when they become adults. An estimated 23,000 youth nationwide age out of foster care without a permanent family each year. 

These young adults, who have already experienced the trauma of being placed in care, enter adulthood largely on their own. They lack the family and support systems that many teens and adults often take for granted, including parental encouragement and access to financial resources. They don’t have parents to call when the rent is overdue, the tuition bill arrives, or they need help getting to a job interview. 

Former foster youth who aged out of care are more likely than their peers to experience homelessness and to lack education and job skills. They are more susceptible to physical and behavioral health problems—including mental health disorders—and more likely to have insufficient access to health care services. Former foster youth are more likely to engage in criminal behavior and face jail or incarceration. They are even more likely to have an early pregnancy and see their own children enter the child welfare system. 

Citing a Los Angeles survey showing that more than a third of children arrested for prostitution were in the foster care system, the Department of Health and Human Services (HHS) observed: “traffickers target those who have an unsuitable life, have been abused, neglected, or exploited already,” Not surprisingly, former foster youth are more likely to fall prey to the scourge of human trafficking, in part due to the high rate at which they run away from their placements.  

For decades, Congress has provided funding to states and local child welfare agencies to supplement laws aimed to help foster children. Altogether, the federal government spends about $12 billion on child welfare programs annually, including more than $6 billion in payments through the Social Security Administration to fund states’ foster care expenses. 

Congress also has established the following benefits: 

• Extended foster care: The Fostering Connections to Success and Increasing Adoptions Act amended the Social Security Act to allow states to extend foster care beyond age 18. This can increase the amount of time that foster youth may remain in care and receive certain benefits, including housing, education, and health care. The Government Accountability Office (GAO) reported that, as of 2019, 26 states had extended foster care. 

• Medicaid eligibility through age 25: Former foster youth are also eligible for certain health care services. Under the Affordable Care Act, former foster youth are eligible for state Medicaid services until they turn 26. 

• Education and job training: Through the federal Chafee Foster Care Program, HHS provides $143 million annually in vouchers for former foster youth to access education, job training, and other services to help them with their transition to independence. The Department of Labor also offers programs through the Workforce Innovation and Opportunity Act to provide job training vouchers. 

• Transition planning and documentation: In 2014, Congress passed the Preventing Sex Trafficking and Strengthening Families Act, which included provisions to improve older foster youth’s transition to independence. The law required states to provide transitional planning for older youth and ensure they receive key documents, such as a birth certificate, Social Security Card, medical information, driver’s license, or state-issued ID. Evidence suggests that foster youth do not fully understand their rights and are not getting the other information and resources they need for successful transition to independence. 

• Housing: Former foster youth are also eligible for housing vouchers and related benefits aimed to support the transition to independence or family reunification.

But, in other ways, governments and child welfare agencies have made  foster children’s lives more difficult by stealing federal benefits that are owed to them by appropriating that money for their foster care. 

Child welfare agencies are seizing foster children’s federal benefits

Between 40,000 and 80,000 foster children are entitled to Social Security disability or survivor benefits. They are owed these benefits if their parent dies after paying taxes into the Social Security system or if they have a disability and qualify for the Supplemental Security Income program. In other circumstances, foster children may be owed survivor benefits if their parent was a veteran. These funds can provide critical financial assistance for a child living in foster care. Eligible children can receive $800 per month or more in Social Security disability benefits. These monthly payments could be used to help foster children overcome their difficult life circumstances, pursue better educational opportunities, or to create a nest egg for when they must leave foster care as adults.

But in many states, child welfare agencies routinely apply for and take foster children’s benefits and use that money to pay for their care. This is currently allowed under federal law. In a 2003 decision, the Supreme Court ruled that child welfare agencies were allowed to apply for and use foster children’s Social Security benefits on behalf of the foster child. 

This misguided practice, allowed by the Supreme Court’s ruling, has become widespread. In 2018, 38 states and the District of Columbia seized about $180 million in foster children’s Social Security benefits. In 2021, the GAO reviewed Social Security Administration (SSA) data and identified 25,400 foster children who were receiving benefits as of November 2020; in 81 percent of the cases, the “representative payee” was a child welfare agency. GAO’s analysis suggests that the number of foster children whose benefits were taken by child welfare agencies is surely much larger than 25,400, since SSA only gathered information from 11 states.

Ian Marx is a former foster youth who has been raising awareness about this problem. “When I was 11 years old, I lost my mother and my father was arrested for second-degree murder. With no relatives able to care for me, I was placed in foster care, where I stayed until I aged out at 18,” he wrote. “But I never saw a red cent of my mother’s survivor benefits, or the Supplemental Security Income benefits I became eligible for after coming into care. These benefits, which my social worker bluntly told me I shouldn’t bother to pursue, would have totaled over $1,000 a month.”

The good news is that there is growing national momentum to end the practice of child welfare agencies taking foster children’s federal benefits. SSA has

recently acknowledged and applauded states that are implementing or considering laws to more

fairly and appropriately use children’s benefits in the child’s best interests. According to the Children’s Advocacy Institute at the University of San Diego, “[a]s of July 2024, 30 states and jurisdictions have taken some action across a broad spectrum to protect the rights of foster youth to their federal benefits.” 

In 2023, Arizona enacted the first comprehensive state law to prohibit the practice. Before the change, the Arizona Department of Child Safety had taken about $6 million from foster children in 2022—or more than $700 per month from roughly 700 foster children—according to Arizona Capitol Times. “This bill signing is a tremendous win for kids in foster care,” explained Darcy Olsen, who leads the Center for the Rights of Abused Children which advocated for the Arizona reform. “While it was legal for the agency to take those benefits, there’s a consensus that it is immoral.” (emphasis added)

While state lawmakers are working to address this problem in state legislatures, Congress has an opportunity to protect foster children’s benefits once and for all. In 2022, Rep. Danny Davis (D., Ill.) introduced the Protecting Foster Youth Resources to Promote Self-Sufficiency Act. The bill would expressly prohibit state child welfare agencies from taking foster children’s benefits to pay for their care. 

While state lawmakers are working to address this problem in state legislatures, Congress has an opportunity to protect foster children’s benefits once and for all. In 2022, Rep. Danny Davis (D., Ill.) introduced the Protecting Foster Youth Resources to Promote Self-Sufficiency Act. The bill would expressly prohibit state child welfare agencies from taking foster children’s benefits to pay for their care. 

Foster children often struggle in K-12 education and need better options 

Beyond simply protecting foster children’s federal benefits, the White House and Congress should help foster children and former foster youth navigate the often challenging transition to independence in adulthood. One important way is to make sure that they receive a high-quality education. As the Department of Education (ED) put it, “a positive PK-12 education experience has the potential to be a powerful counterweight to the abuse, neglect, separation, impermanence, and other barriers these vulnerable students experience.” Unfortunately, foster children struggle to graduate from high school on time. For example, in nine states, fewer than half of foster children graduated high school within four years. 

Giving foster children better education opportunities has been on federal policymakers’ radar for decades, with some good reforms implemented. Since 2002, the Chafee program has funded education and job training vouchers for foster children and former foster youth who were 14 or older. The program receives $143 million annually. In 2008, Congress passed the Fostering Connections to Success and Increasing Adoptions Act, which included a section on education stability that requires school systems to consider education factors like school proximity in child placement. The Every Student Succeeds Act of 2015 also included provisions focused on assisting foster children. For example, state education agencies were required to take steps to improve stability for foster children, such as by paying transportation costs to their school of origin after a placement. 

States and education leaders have also developed programs to provide foster children with better options. For example, Arizona, Florida, and Ohio have established education choice programs aimed to benefit foster children. In New York, an innovative charter school, Mott Haven Academy, is focused on serving homeless and foster children and has reported positive results. These kinds of promising options should be available to foster children across the country. 

Former foster youth need access to direct financial assistance 

Another promising way to help former foster youth successfully transition into independence is to provide direct cash benefits or “fostering independence accounts” as Tim Keller and I proposed back in 2021. While the government services described above may be helpful to former foster youth, a direct financial subsidy to pay for living expenses would likely be more beneficial and could help young adults become independent.

A cash benefit or account could be in the form of an unrestricted cash deposit, similar to a universal basic income. Alternatively, policymakers could create guardrails to steer  financial benefits toward specific costs,  similar to an electronic benefits transfer card. This could limit expenditures to food, housing, utilities, clothing, transportation, and other basic life expenses. The financial benefit could be paired with other assistance, such as financial mentorship and counseling, which could provide additional benefits to help the former foster youth make good decisions and access other benefits that may help with transition. 

In 2020, Santa Clara County, California established a pilot project to provide $1,000 in monthly benefits to former foster youth. The program proved popular with recipients.  A county official reported that the program helped beneficiaries stabilize as they were becoming independent and even allowed some to improve their credit scores, begin saving for home ownership, and graduate college. In 2021, California established a statewide cash benefit worth up to $1,000 per month for former foster youth, based in part on Santa Clara County’s pilot project. 

Recommendations 

Executive Action 1: The White House should direct the Administration for Children and Families (ACF) to ensure each state cooperates with the Social Security Administration in meaningful data exchanges. SSA and ACF should improve transparency and data collection to better understand which states and child welfare agencies are applying for and seizing foster children’s Social Security benefits.

According to GAO, the 2018 law does not require states to participate in the new data exchanges. However, after conducting additional outreach to state and local government agencies, the SSAshould issue policy guidance encouraging states to participate.

Executive Action 2: The Department of Education should collect additional information to ensure that states are complying with Every Student Succeeds Act requirement to provide educational stability.

Collecting more statistical information about foster children’s educational opportunities and performance, including through the National Center for Education Statistics, would help inform public understanding of the challenges foster children face and assist in developing needed  policy reforms. Moreover, ED should review state education agencies’ compliance with the 2015 ESSA law’s requirement to improve the educational stability for foster children, such as paying transportation costs to their school after placement. 

Congressional Action 1: Congress should pass a law protecting foster children’s federal benefits.

The recent state actions to protect foster children’s federal benefits and end the practice of child welfare agencies taking their money to pay for their care should spur federal lawmakers to act. Passing legislation to protect foster children’s benefits, such as the Protecting Foster Youth Resources to Promote Self-Sufficiency Act, would help thousands of foster children by allowing them to directly use and save their owed federal benefits to help support their transition to independence.

Congressional Action 2:  Congress should expand the reimbursable uses of federal funds to allow states, territories, and tribal governments to  target direct financial benefits to youth aging out of foster care. 

Specifically, Congress should update Title IV-E of the Social Security Act to authorize states to access federal funding to provide direct financial aid to individuals who will soon or who have already aged-out of foster care by making such expenses reimbursable. This would allow more states to follow California’s example in establishing a universal direct financial benefit program for foster children. Granting states additional flexibility to innovate has the potential to address current gaps in support for and limit the negative outcomes of youth who age out of foster care.

Congressional Action 3:  Congress should increase funding for and expand the Chafee Foster Care Program for Successful Transition to Adulthood to provide additional resources for education and job training vouchers and to allow younger children to become eligible for the benefit. 

By providing direct education and job training vouchers to foster youth, the Chafee program gives older foster children direct funding assistance that they can use to obtain skills that could help them achieve independence in adulthood. Given the significant challenges that foster children face in K-12 education, Congress could increase funding for the Chafee program and lower its eligibility age to allow younger foster children to receive education and job training vouchers—potentially through an education scholarship account mechanism—that could be used for tuition, tutoring, summer school, and other enrichment programs. 

Congressional Action 4: Congress should conduct oversight to determine whether states and local education agencies are complying with federal law to ensure that foster children have access to high-quality education options. 

Congress should ensure that states and school districts are complying with the Fostering Connections to Success and Increasing Adoptions Act and the Every Student Succeeds Act of 2015 that were intended to ensure that foster children have access to a high-quality and stable education. For example, Congress could conduct fact finding or direct the GAO to review state and local school districts practices and whether they are complying with these laws. These initial steps would inform whether additional federal reforms are needed to improve education opportunities for foster children. 

Conclusion

There is a growing bipartisan consensus that youth aging out of foster care face unique challenges. Protecting foster children’s federal benefits so that states don’t steal them and improving educational opportunities for teens in foster care are incremental but meaningful reforms. Likewise, encouraging states to provide direct financial assistance to former foster youth will likely provide long term benefits to some of the most disadvantaged children in our society.