Center on Assets, Education, and Inclusion

This study examines patterns in 529 college savings plan account opening, family contributions, and asset accumulation by participants in the Promise Indiana Children’s Savings Account (CSA) program who are enrolled from Wabash County, Indiana1. While this report uses administrative data to focus on saving, savings outcomes represent only one metric of CSA “success.” Importantly, rigorous research suggests that the positive effects of CSAs on such outcomes as educational expectations (Kim, Sherraden, Huang, & Clancy, 2015) and children’s well-being (Huang, Sherraden, Kim, & Clancy, 2014) can be realized even if families are not contributing to the account (Sherraden et al., 2015). Indeed, the Promise Indiana design incorporates research evidence that simply having a CSA can catalyze other positive outcomes for children and families, including by reinforcing children’s sense of a college-saver identity (Elliott, 2013a). Many aspects of the Promise Indiana CSA initiative are designed to cultivate these effects and, as described below, are provided to all children within a participating school, whether or not their families have opened a 529 account or, certainly, begun to contribute. Therefore, the potential value of a CSA—including those offered through Promise Indiana—should not be viewed only in terms of the dollars in the account, and saving should not be considered the only worthwhile interaction with the CSA. At the same time, contributing to a Children’s Savings Account may be one way that expectations of college are communicated to children. Additionally, saving is a potentially significant source of asset accumulation for higher education and can help to provide a sound financial foundation for a child’s future. As such, analysis such as this adds to the growing body of evidence of CSAs’ effects on children and families. Importantly, direct comparisons to these measures in other CSA programs is complicated by acute differences in target populations, program design, and the savings context. However, to contextualize these findings, a review of account opening, saving, and asset accumulation findings from the CSA field can be found in earlier AEDI reports (e.g. Lewis et al., 2016; Lewis, O’Brien, & Elliott, 2017).

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CSA Report Year 2017