A new report from the Institute for Higher Education Policy (IHEP) and the Corporation for Enterprise Development (CFED) examined how cities and states can help low-income and moderate-income families save for college through 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 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,” Julie Ajinkya, IHEP vice president of applied research, said. “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 cities have designed CSA programs to help low- and moderate-income families accumulate savings for college. These state and local programs provide CSAs with an initial “seed” deposit to start each student’s account, then 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,” Carl Rist, senior director of children’s savings at CFED said. “Linking CSAs with college affordability efforts and other community supports strengthens the promise of future college success.”
A program that illustrates how CSAs can be integrated with other initiatives is the Beyond Housing program in St. Louis, Missouri.
Beyond Housing links 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.