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The Ladder

A Blog from New America's Asset Building Program

Symposium Report: Linking Savings and Educational Outcomes

Published:  November 29, 2012
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Image/KU Assets and Education Initiative

Earlier this week, the Assets and Education Initiative of the University of Kansas School of Social Welfare and the Center for Social Development at Washington University in St. Louis released a report, “Linking Savings and Educational Outcomes: Charting a Course for Scholarship and Policy,” documenting some key findings from their symposium earlier this year. From children’s savings accounts to the Department of Education’s new GEAR UP initiative to reducing college debt, the report explores interventions that could put higher education in reach for all.

A key theme in the report and among the accompanying research papers is the role of asset development not only in funding a college education, but also in cultivating habits and identities that can facilitate college access and lifelong financial security. For example, as Sondra Beverly describes, strategies that focus on simply motivating either parents or their children to save are unlikely to “substantially level the playing field,” as low-income families will still have far more difficulty in accumulating sufficient assets to finance a college education compared to their higher-income counterparts. Still, she notes, provided these efforts include a financial education component, they are likely to instill the habit of saving, which parents have been found to pass down to their children.

Similarly, Rachel Black notes the role of saving in fostering college-bound identity among low-income students, a phenomenon that William Elliott previously described in his paper, “We Save, We Go to College.” Students who have savings set aside for their education are more likely to have expectations of college attendance. These expectations in turn lead students to feel a greater connection between their present actions and future circumstances, which can result in increased motivation to engage academically and overcome challenges. The ASPIRE Act would be one way to support college-bound identity for all children, by creating and seeding a savings account for every child at birth. Supplemental contributions for lower-income families, along with financial education offered for all, would allow the accounts to have a long-term impact and reduce disparities in college access.

Beyond the psychological effects of savings, however, one of the report’s points that struck me most was Thomas Shapiro’s observation that we’re seeing a major shift of the cost burden of higher education from society onto individuals—suggesting diminished recognition of how an educated populace benefits the country as a whole. Consequently, a college degree is becoming increasingly inaccessible to both low-income students and students of color whose families have been historically excluded from wealth-building opportunities. Tuition hikes that far outpace increases in the cost of living, combined with sharp budget cuts at some of the country’s most successful public university systems, signal a problem that cannot be solved by savings interventions alone. As Shapiro writes, “We continue to view these issues in terms of assets when we should also consider a larger vision of public investment for the public good.”

Check out the symposium report here, and the related publications here.


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