The rise in student loan debt has directed critical attention to the growing pace of college costs as well as the reliance on loans to finance those costs. For graduates entering the workforce in recent years, many are finding that they are unable to find the type of job they thought they were securing when they received their degree, if they are able to find a job at all. Consequently, more loans are going unpaid and student loan debt has become the only class of consumer debt where defaults are increasing.

“Creating a Financial Stake in College” is a four-part series of reports that focuses on the relationship between children’s savings and improving college success. This series examines: (1) why policymakers should care about savings, (2) the relationship between inequality and bank account ownership, (3) the connections between savings and college attendance, and (4) recommendations to refine children’s savings account proposals.

On 24 May 2010, after only a few weeks in office, the Conservative–Liberal Democrat Coalition government announced that, as part of a package of measures designed to cut public spending by £6.2 billion, the Child Trust Fund (CTF) would be abolished, saving the government just over £500 million a year. As a result, children born in the UK in 2011 will no longer receive £250 at birth and a further £250 when they reach the age of seven (£500 for poorer families and disabled children).