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The Ladder

A Blog from New America's Asset Building Program

New Research on Low-Income Youth, Assets, and Educational Access

Published:  November 30, 2012

Academic research is sometimes said to “collect dust on the shelf.” A recently published report shows this is not always the case.

The Assets and Education Initiative at the University of Kansas’ School of Social Welfare and the Center for Social Development at Washington University in St. Louis, along with their partners, bridge this gap between research and application. By producing solid research and engaging with policymakers, practitioners, and advocates, AEDI and CSD inform policy initiatives and bring their research to practice.

AEDI and CSD have released a report on the 2012 Assets and Education Research Symposium. The report addresses core challenges: making higher education affordable for low-income students, improving college preparation, and creating access to asset-accumulation vehicles. Through original papers, keynote presentations, and panel discussions, Symposium participants focus on explaining the potential role of assets in educational outcomes for low-income children and youth, with a particular emphasis on the policy implications of the growing body of knowledge. The 2012 Assets in Education Symposium centered on three essential points:

1. Low-income youth face a college affordability crisis, a looming threat to the entire nation.

  • Higher education is crucial for economic well-being and opportunity, but rising costs and the resulting unaffordability have dire effects for low-income students (Heller, 1997; Leslie & Brinkman, 1988; McPherson & Schapiro, 1998). Costs associated with college attendance are increasing while the number of grants and scholarships is decreasing, shifting the burden of college loans to families.
  • High debt levels can compromise lifelong economic security and threaten academic achievement, and having student loans above a certain level becomes counterproductive (Zhan, 2012).
  • The economic return on a college education may be less for African American, Hispanic, and moderate-income students who shoulder more of the burden of paying for college than their White and higher-income counterparts (Elliott and Friedline, 2012).

2. There is a link between assets and educational outcome, and these connections should influence policymaking and structures for higher education financing.

  • Assets improve academic preparation: Assets can affect not only outcomes and behaviors at college but also academic preparation for higher education. Unlike other mechanisms of financing higher education, assets are associated with preparation for college as measured by improved English (i.e., reading and writing) scores (Chowa, Masa, Wretman, & Ansong, 2012).
  • Assets shape parental expectations: Kim, Sherraden, and Clancy (2012) find that financial assets are significantly and positively associated with parents’ expectations for their children and that variation in parental expectations between non-Hispanic Whites and minority families can be attributed to disparities in financial assets.
  • Assets contribute to college-bound identities: Assets build positive expectations about higher education and increase college readiness. Assets may help youth develop college-bound identities and shape behaviors that reinforce this view. Saving may make the future feel more proximate and affirm the importance of education (Oyserman, 2012). Destin (2012) suggests that assets impact outcomes by helping low-income youth see themselves as college bound.
  • Assets promote college enrollment: Grinstein-Weiss, Sherraden, Gale, Rohe, Schreiner, and Key (2012) present experimental evidence that being assigned to a three-year IDA program treatment group has a significant impact on educational enrollment, a positive—but not significant—impact on college degree completion, and an increase in education level six years after the program’s completion.
  • Assets can increase graduation rates: According to Loke (2012), when lower wealth households experience significant asset accumulation, youth from these households graduate from college at rates similar to youth from wealthier households.

3. We can improve low-income youths’ financial security and educational achievement

  • Tailoring incentives: While individual and family characteristics help to shape savings behaviors (Webley & Nyhus, 2012; Otto, 2012), evidence suggests that there are institutional influences. Incentives encourage individuals to save, and restrictions on the use of funds help people focus on particular savings goals (Sherraden, Peters, Wagner, Clancy, & Guo, 2012).
  • Providing subsidies: According to Friedline, Elliott, and Chowa (2012), the median amount of savings held by low-to-moderate-income young adults in 2007 was $390, which suggests that subsidies are necessary for young adults to have opportunities to pursue postsecondary education.
  • Encouraging early investment: According to Williams Shanks and Robinson (2012), the impact of a lack of resources on a child’s cognitive development and health is cumulative. Similarly, Destin (2012) argues that the benefits of parental investments in educational enrichment compound over time.
  • Targeting: Interventions should target low socioeconomic status households in addition to directly investing in children’s asset holdings. Resources at the household level reduce financial triggers of stress, improve caregivers’ ability to mediate stress, and improve the educational expectations of parents (Williams Shanks & Robinson, 2012).
  • Combining assets with other academic enrichment: Being “prepared” for college requires academic readiness and financial capability, two characteristics that may be interdependent. The Department of Education’s pilot to incorporate savings accounts into Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP)—an initiative to build college preparedness among low-income middle and high school students—exemplifies this two-part approach to preparedness.

The core message from the Symposium is that not all financial aid for college leads to the same results. College loans help pay for college, but assets have the potential for multiple positive effects before, during, and after college. This is becoming increasingly evident.

These are conversations we should have together, building on respective strengths of each sector—academia’s scientific inquiry, practitioners’ wisdom from the field, and policymakers’ understanding of best practices.

Our challenge now is to build the structures, field capacity, and political will to put this knowledge into practice. The 2012 Assets in Education Symposium report is a step in that direction.

To read the full report, click here.

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