The college savings movement is growing across the country. Its roots come from the nonprofit asset-building community, which is distinct from the college access and success field. But the two movements share a deep commitment to supporting the same low-income individuals and families to build stronger futures.
By working together, we can ensure that Child or College Savings Account (CSA) programs are well-designed and integrated with the other access strategies proven to increase postsecondary enrollment and completion. An October 2019 report co-written by NCAN and Prosperity Now outlines the benefits of such partnerships and provides four case studies of organizations that have already successfully integrated children’s savings with college access services.
Thanks to a grant from the Charles Stewart Mott Foundation, NCAN is collaborating during 2018-20 with the Campaign for Every Kid's Future (CEKF), an organization dedicated to the expansion of CSAs.
Below you’ll find some basics about CSAs and examples of how they are operating in several U.S. communities. For more in-depth information about CSAs, please also visit Prosperty Now's website.
What is a CSA?
A CSA is a savings account whose proceeds are designated to pay for a student’s higher education after age 18. These accounts are often created by a state or local government or nonprofit organization and intended to encourage more students to pursue postsecondary education.
Many CSA programs offer savings incentives for low-income families who make their own deposits or engage in activities related to college preparation or financial literacy. Investment growth in the accounts can be tax-free at the federal or state level.
In 2017, CEKF’s annual report found that 382,000 children in 54 programs had a CSA, a 22 percent increase from 2016. Programs ranged from small, community-based programs serving a few hundred kids to large-scale programs enrolling at least 2,000 children annually. These largest programs enroll the majority of children who have a CSA; the seven large programs accounted for 86 percent of total CSA enrollment.
Explore Prosperity Now's interactive national map of CSAs to learn more about programs in your area or explore models in other communities.
How effective are CSAs in helping more students go to college?
Researchers hypothesize that CSAs can increase the likelihood of a child attending and graduating college because they instill the early belief that postsecondary education is possible, encouraging students to make choices consistent with college preparation throughout their K-12 education.
A 2013 study led by Professor William Elliott, now at the University of Michigan School of Social Work, examined 2009 data from the national Panel Study of Income Dynamics and its supplements, focusing on 512 families with incomes below $50,000 and 345 families with incomes of $50,000 or more. The analysis found that students from families earning below $50,000 but who had from $1 to $499 saved for college were more than four times more likely to attend college than other low-to-moderate income students with no college savings.
Examples of CSA programs that support students from low-income backgrounds and students of color
- All states offer a college savings account, known as a 529 account, that any family can use to save tax-free for college, but just 12 states provide savings matches to incent lower-income families to participate. Louisiana is one of them. Because the state 529 plan is run by the Louisiana Office of Student Financial Assistance, the same agency that manages financial aid for college, college savings information is particularly well-integrated into outreach to low-income families about how to pay for college. Learn more about the Louisiana START Saving Program.
- The Virginia529 plan partners with several nonprofit organizations to make account contributions to some low-income high school students as they achieve certain college preparatory milestones. Students can earn up to $2,000 if they maintain a 2.5 GPA, minimize school absences, engage in community service, and complete a FAFSA. Virginia529 collaborates with college access programs and the state community college system to reach students.
- In 2018, Pennsylvania's governor signed a bill establishing the Keystone Scholars program, which will grant $100 to every baby born in Pennsylvania or adopted by Pennsylvania residents, starting in January 2019. The money can only be used for postsecondary education at an approved institution, including trade schools, vocational programs, community colleges, and universities. Learn more about the Keystone Scholars program.
- Also in 2018, Massachusetts announced that beginning in 2020, the state will automatically deposit $50 into each 529 college savings account opened within one year of a baby’s birth or adoption. The new program, called SeedMA Baby, represents a statewide expansion of a pilot version tested with kindergartners in Worcester and Monson, MA, that began in 2016. Learn more about the SeedMA Baby initiative.
- Nebraska's Meadowlark Program will automatically enroll every state-resident baby born, starting Jan. 1, 2020, in Nebraska’s NEST 529 college savings plan. The legislation created two programs to incent contributions by families, employers, and especially low-income families.
- “I Have A Dream” Foundation affiliates in Colorado, Iowa, and New York City offer a DREAM accounts program that combines matched savings contributions with an evidence-based set of college access milestones and a robust postsecondary financial education curriculum. The DREAM accounts reinforce a college-going culture and provide families with vital information and financial support to help offset the cost of college tuition and supplies. Read more on the NCAN blog about how the program has influenced students on their pathway to college.
- In Massachusetts, the nonprofit organization Inversant has oriented its entire program around college savings. Inversant combines a monthly learning curriculum for parents, incentivized savings, and partnership with state agencies and the Boston Public Schools to pilot savings programs for elementary and middle school students.
- The KC Scholars college savings program provides 500 9th-graders annually with a $50 529 account, and some students receive savings matches on their own contributions and incentives for completing key college-ready milestones for a total of up to $7,000.
- The Oakland Promise is a multidimensional community effort to triple postsecondary attainment for Oakland students by 2025. It includes two savings account programs: Brilliant Baby ($500 at birth with additional savings matches available) and Kindergarten to College ($100 for all kindergarten students, with additional matches available).
- Since 2015, the El Monte Promise in California has helped 379 low-income students and families save almost $200,000 for college. Free parent workshops in multiple languages at convenient times help families understand that they can in fact afford college for their children and learn the lingo of college admissions and financial aid. This information empowers parents to continue to support their students’ college aspirations.
Other Types of Programs
- In 2018, Lancaster ISD (LISD) became the first district in North Texas to launch Dollars for College, a college savings account program that provides low-income families with a safe, trusted, easy-to-access and low-cost opportunity to start building college savings for their children. Learn more about this school district-based CSA program.