Center on Assets, Education, and Inclusion

Successfully advancing CSA policy will require analyzing the political context so that proposals can take advantage of windows of opportunity, framing CSAs as congruent with prevailing values, and crafting CSAs such that they are positioned as effective solutions to important policy problems. To this end, research documenting the concerning effects of the overreliance of student debt as a mechanism through which to finance college, as well as the potential of asset based approaches to potentially reduce high-dollar debt and improve educational outcomes, is perhaps one of the most significant developments towards national CSA policy. CSAs can be clearly understood to have potential to solve one of our most pressing problems: how to bring college affordability to enough prepared students to increase educational attainment without compromising future economic security—for the nation or for individual students. This framing of CSAs has practical fiscal implications, too; if asset-based approaches to financing higher education are seen as ways to reduce dependence on debt-heavy ones, then the ‘net cost’ might be understood to be smaller, particularly in light of the potentially negative long-term financial effects of outstanding student loans.

Related items: Briefs:

From a Debt-Dependent to an Asset-Based Financial Aid Model Institutional Facilitation and CSA Effects CSAs As An Early Commitment Financial Aid Strategy From Disadvantaged Student to College Graduates: The Role of CSAs How CSAs Facilitate Saving and Asset Accumulation Designing for Success Investing In Our Future Executive Summary

Building Expectations, Delivering Results: Asset-Based Financial Aid and The Future of Higher Education Infographics

College Savings Accounts: More Degrees, Less Debt The Role of Institutional Facilitation in Academic Success Reports

Examining The Canadian Education Savings Program and Its Implications for U.S. Child Savings Accounts (CSA) Policy

CSAs should include every child of a given age—ideally, at birth, although there are certainly reasons to tie additional incentives to accomplishment of specific academic or life milestones. Including everyone in CSAs underscores the stake we all have in each other’s prosperity, which is particularly true when it comes to global competitiveness and the educational outcomes CSAs can deliver. Universality also means inclusiveness, or meaningful access to asset accumulation by low-income individuals who otherwise may not have truly equitable opportunities.1 This speaks to the need for features such as automatic enrollment (opt-out), concerted outreach and education strategies, and special incentives for lower-income households, in order to avoid a ‘universal’ CDA policy turning into another asset development investment that disproportionately benefits those already advantaged.

Related items: Briefs:

From a Debt-Dependent to an Asset-Based Financial Aid Model Institutional Facilitation and CSA Effects CSAs As An Early Commitment Financial Aid Strategy From Disadvantaged Student to College Graduates: The Role of CSAs How CSAs Facilitate Saving and Asset Accumulation Investing In Our Future Children’s Savings Accounts and a 21st Century Financial Aid System Executive Summary

Building Expectations, Delivering Results: Asset-Based Financial Aid and The Future of Higher Education Infographics

College Savings Accounts: More Degrees, Less Debt The Role of Institutional Facilitation in Academic Success Reports

Examining The Canadian Education Savings Program and Its Implications for U.S. Child Savings Accounts (CSA) Policy

Part of the explanation for rising inequity in educational attainment between disadvantaged children and their wealthier peers may be found in the different access to capital development—human and financial—afforded to these groups of children, within U.S. policy structures. Where wealthy children benefit from their families’ ability to make college a likely part of their future, low-income children are more likely to perceive increasing college costs as insurmountable burdens. Where wealthy families receive considerable tax benefits from participating in state 529 college savings plans, low-income families participating in means-tested public assistance face strict penalties if they save money. These inequities are manifest, then, in lower college enrollment and graduation rates for disadvantaged children, and we collectively pay the price in lost productivity and a constrained ability to compete in the global economy.

To the extent to which evidence suggests that assets can alter these educational trajectories, CSA policy may be considered an investment in our shared future. CSAs would provide an alternative to current consumption-based welfare supports for low-income households and may help to close the gaps by using the lever of U.S. policy commitment to provide disadvantaged children with access to transformative asset development.

Related items: Briefs:

From a Debt-Dependent to an Asset-Based Financial Aid Model Institutional Facilitation and CSA Effects CSAs As An Early Commitment Financial Aid Strategy From Disadvantaged Student to College Graduates: The Role of CSAs How CSAs Facilitate Saving and Asset Accumulation Designing for Success Children’s Savings Accounts and a 21st Century Financial Aid System Executive Summary

Building Expectations, Delivering Results: Asset-Based Financial Aid and The Future of Higher Education Infographics

College Savings Accounts: More Degrees, Less Debt The Role of Institutional Facilitation in Academic Success Reports

Examining The Canadian Education Savings Program and Its Implications for U.S. Child Savings Accounts (CSA) Policy

This paper makes the case that the pattern low-income families walk into is a present time-oriented or consumption-based welfare system, with attendant incentives and disincentives; in contrast, the pattern higher-income families walk into is future-oriented or asset-based. These two divergent systems do not deliver equitable educational outcomes for children. To ensure that higher education can play an equalizing role in the U.S. economy, the nation needs a better welfare system for the poor, one that builds on the asset-accumulation structures that serve the needs of advantaged families. This new institutional approach would undo the current system of educational advantages for higher-income children over low-income children and, in turn, redress educational inequalities in America. In order to create a level playing field welfare policies are needed that enable low-income families to accumulate assets. In this paper we discuss policies that might help low-income families accumulate assets, including modifications to existing income supports, as well as the development of complementary asset-based institutions.