Financing College Success
Thursday, May 31, the Asset Building Program hosted an event Financing College Success: Innovations to Promote Readiness, Access, and Completion. We were particularly excited to host Martha Kanter, Under Secretary at the U.S. Department of Education and Congressman Chaka Fattah from Pennsylvania to speak about their respective work to promote access to higher education. Reid Cramer, Director of the Asset Building Program, introduced our speakers and moderated the conversation. He began by noting that the recent focus on student loan debt has driven attention to earlier interventions to help students afford college. Successful college attendance is a process that begins many years before students reach the end of high school and has a significant financial component. Savings, public benefits, and other programs play a role along the way to give students a sense that college is financially within their reach. The Asset Building Program is particularly excited about the recent announcement that the Department of Ed is going to use at least $8.7 million in funding to conduct a college savings demonstration project with students in the GEAR UP program (Gaining Early Awareness and Readiness for Undergraduate Programs).
Congressman Fattah spoke first, expressing his excitement to be present for the announcement of this demonstration program, since he is one of the original architects of the GEAR UP program. He was particularly impressed by the program’s demonstrated impact on college attendance and was encouraged to see progress towards developing an evidence-based approach to a college savings model. By demonstrating success with this project, GEAR UP can lay the foundation for scalable initiatives around the U.S.
Martha Kanter explained the potential this demonstration project has to give students a tangible path to college while simultaneously engaging families around their children’s aspirations. Kanter drew on her experience working at one of the largest community colleges in the U.S., pointing out the importance of linking middle schools, high schools, and colleges to strengthen the relationships that keep students from falling out of the pipeline to college. She also noted the importance of financial education, pointing to GEAR UP’s emphasis on including a financial literacy curriculum for students.
William Elliott, a Senior Research Fellow with New America and Assistant Professor at the University of Kansas spoke first on a panel of experts. His research findings (his series of reports “Creating a Financial Stake in College” are available here) suggest a strong relationship between savings and college attendance. He analyzed the differing roles environment, effort, and ability have on children’s success in attending college. He believes his conclusions demonstrate that the American Dream narrative (effort combined with ability will translate into success) is fundamentally flawed. Specifically, he finds the role of societal investment and resources are another key aspect to success. The distinction between individual efforts and societal input is blurred, but profound. Ultimately, the goal of children’s savings program should be to promote personal-level and societal-level investment in children’s futures. Children who see society supporting their development have higher expectations for their futures and form identities around higher levels of educational achievement.
Debra Saunders-White, Deputy Assistant Secretary for Higher Education Programs at the Department of Education, shared more about the specifics of the GEAR UP demonstration project as the key administrator of the program. She discussed the research design in greater depth, emphasizing the value of having a controlled and random trial set-up to better determine the effects of assets. The specifics of the program as currently outlined would provide an account to participating students in the amount of $200. Students who are able to put away $10 every month during their high school years are eligible for a one-to-one match. Ultimately, the funds in the account can total up to $1,160. The program is open to public commentary for a month and ED welcomes detailed feedback. ED is particularly interested in ideas about the type of account and any insights into how to best manage an automatic enrollment process.
Evelyn Ganzglass, Director of Workforce Development at the Center for Law and Social Policy, discussed the specific issues related to community college affordability. While community colleges are cheaper than four-year institutions, they are still many thousands of dollars and many students simultaneously juggle family and work obligations while attending. Her work focuses on a range of interventions that aim to improve community college success, including building assets, accessing public benefits, emergency loans, financial literacy education, and work opportunities more conducive to full-time attendance at school. Specifically, Ganzglass is working to streamline access to public benefits for community college students. Currently the financial aid system and public benefit system create a challenging situation for low-income students: will they lose their aid if they apply for benefits? Will their aid disqualify them from receiving benefits? Some of this has been sorted out at the federal level but logistical challenges remain.
Lastly, Kevin Carvey, the current policy director at Education Sector but incoming director of New America’s Education Policy Program, spoke about the role children’s savings can play in the higher education landscape. He admitted to some initial skepticism about the benefits of this model: he wondered if such a program was so complicated, why not simply invest the funds in additional Pell Grants (which benefit low income students attending college). However, he sees the value of students engaging from a young age with both the financial and academic aspects of college readiness through a savings account model. The embedded nature of a “dual commitment” on the part of the individual and broader society into the fabric of the account structure strengthens the program.
Audience members asked for more information about the logistics of the demonstration project, including ethical dilemmas that the Department of Ed has grappled with. Questions also probed William Elliott on his research in the effects of savings on children’s college attendance. (Again, his series on this issue makes for a great introduction to the research on this issue.)