Center on Assets, Education, and Inclusion

Children’s Savings Accounts (CSAs) are savings vehicles, usually initiated early in a child’s life and usually designated for postsecondary educational expenses (Elliott & Lewis, 2014). While CSAs are financial products, typically held either in a deposit institution such as a credit union or bank or in a state-supported 529 college savings plan, they are more than just an account. CSAs are best understood as transformative asset-based interventions that reshape the distributional consequences of the current educational structure (Elliott & Lewis, 2015). As such, CSAs have significant implications for improving educational outcomes, particularly among low-income and otherwise disadvantaged children (see Elliott, 2013 re: asset effects on children’s educational attainment). This potential to close achievement gaps by cultivating greater educational expectations, engagement, and persistence among children less likely to succeed without such interventions has captured policymakers’ attention and galvanized significant momentum for Children’s Savings Accounts. In recent years, CSAs have been implemented by school districts (such as Kindergarten-to-College in San Francisco), state governments (Nevada’s College Kickstart and Connecticut’s CHET Baby Scholars), state/private partnerships (Maine’s Harold Alfond College Challenge is funded by the Harold Alfond Scholarship Foundation, but administered through the state’s NextGen 529 plan), and community-based organizations (Promise Indiana, started by the YMCA of Wabash County, as well as New Mexico’s Prosperity Kids, the focus of this report). There is municipal movement, as well, with a CSA recently announced in St. Louis, Missouri, and programs soon to come online such as in Boston, Massachusetts. State leaders are also exploring ways to integrate the principles of children’s asset building into their work in order to leverage the benefits of CSAs on educational outcomes within their respective states. These efforts include a two-generation approach in public assistance programs in Colorado, a child support savings initiative in Kansas, and new CSA pilots in development in Vermont, Massachusetts, and New Hampshire.

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Children's Savings Account Working Paper Year 2015