The Institute for Higher Education Policy (IHEP) in partnership with the Corporation for Enterprise Development (CFED) today released new analysis detailing how cities and states nationwide can better support low-income and moderate-income families with saving for future college tuition and living expenses through increased participation in Children’s Savings Accounts (CSAs).
The policy brief, Better Together: Policies That Link Children's Savings Accounts With Access Initiatives to Pave the Way to College, explores how state policymakers, local policymakers, and CSA program leaders can holistically integrate CSAs with broader college affordability initiatives, social service supports, and community engagement efforts. Better integration and increased CSA participation can help families improve wealth-building, increase postsecondary degree attainment, and ultimately support intergenerational mobility for low-income families.
“There is no denying how difficult it is for many families to afford college,” said Julie Ajinkya, Ph.D., IHEP vice president of applied research. “CSAs provide quantifiable benefits for participating families but policymakers do not always succeed in reaching the populations who stand to gain the most from these tools. That needs to change.”
In recent years, several states and localities from Maine to San Francisco have designed CSA programs to help low- and moderate-income families accumulate savings for future college education. As part of these efforts, these state and local programs typically provide CSAs with an initial “seed” deposit to start each student’s account, then strategically offer incentives for additional contributions from relatives, friends, or students themselves.
"CSAs are a proven tool for building college aspirations and helping kids and families accumulate real savings to pay for college," said Carl Rist, senior director of children's savings at CFED. "Linking CSAs with college affordability efforts and other community supports strengthens the promise of future college success."
Low- and moderate-income students with dedicated college savings of between $1 and $499 are three times more likely to attend college and four times more likely to graduate from college than those without savings.
The Oakland Promise and St. Louis’ Beyond Housing programs model how policymakers can integrate CSAs with college affordability initiatives, financial and social supports, and community engagement efforts. Better Together explores both programs and urges state and local policymakers to:
- Design CSAs as tools integrated with broader college affordability initiatives, such as college promise programs; and
- Design CSAs as tools integrated with social services that address families’ holistic financial needs.
The Oakland Promise exemplifies how to integrate CSAs with complementary college attendance and affordability initiatives. The program which is designed to triple the number of college graduates in Oakland, California, smartly integrates multiple college readiness, affordability and persistence programs, such as mentoring and guaranteed college scholarships, to help participating families save and plan for college expenses.
In St. Louis, Missouri, Beyond Housing is linking CSAs to other housing and social service resources to help residents manage short-term needs and long-term investments. This integrated model provides participating families with holistic social supports for health, education, job and overall financial well-being.
CSAs are an underutilized savings tool that can help bridge college access and affordability divides between low-income and higher-income families. Policymakers must be thoughtful and strategic in their approach to supporting participating families gain the most from these tools.
To access the policy brief, please visit: www.ihep.org/better-together.