Center on Assets, Education, and Inclusion

Children’s Savings Accounts (CSAs) are interventions that seek to build assets for children to use as longterm investments (Goldberg, 2005; Sherraden, 1991), particularly for postsecondary education. Provided through financial institutions, CSAs generally include progressive features, such as initial seed deposits, financial incentives for attaining certain academic benchmarks, or matches for savings deposits (e.g., Elliott & Lewis, 2014). Distinct among financial aid policies for their cultivation of improved outcomes throughout children’s lives, CSAs aim to equip children, particularly those who are disadvantaged, with assets that have demonstrated associations with academic achievement (Elliott, Kite, O’Brien, Lewis, & Palmer, 2016) and educational attainment (Elliott, 2013; Elliott & Beverly, 2011). CSAs also connect households to mainstream financial institutions (Friedline, 2014), activating families to save for their children’s futures and their later financial well-being.

In Celebration of the Center for Social Developments 20th Anniversary, AEDI held a roundtable on the development of asset based policies in the U.S. since Michael Sherraden's book, Assets and the Poor.

American society reflects considerable class immobility, much of which is due to the wide gap in college completion rates between advantaged and disadvantaged groups of students. In the introduction we discuss the factors that cause unequal college completion rates, introduce assets as an explanation stratification scholars often ignore, and then outline the remainder of this report.

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In the last few decades, children's savings accounts (CSAs) have emerged as a strategy for preparing children for their educational and financial futures, especially for those from low- to moderate-income households. This means a savings account is opened early in life and any accumulated savings can be used toward children's future expenses like college tuition or small business entrepreneurship. One question regarding CSA design is whether ownership over accounts should reside with children or parents. In other words, do children benefit educationally and financially when CSAs are in their names, or is it sufficient for parents to save on their children's behalf? This brief presents findings of the effects on children's financial futures when savings accounts are opened in their names. Findings validate the design of many existing CSAs and point to the need to reexamine policies that may discourage families from establishing accounts in children’s names.

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