Center on Assets, Education, and Inclusion

In this study, we propose that children who have a savings account may be more likely to have higher math scores than children without a savings account. We find that children’s savings accounts are positively associated with math scores. Children with savings accounts on average score almost nine percent higher in math than children without a savings account. Further, results suggest that children’s savings accounts fully mediate the relationship between household wealth and children’s math scores. However, household wealth moderates the mediating relationship. We find math scores of low-wealth children increase by 2.13, middle-wealth children’s increase by 4.36, while high-wealth children’s increase by 6.59 points. Policy implications are discussed.

This paper explores young children's perceptions and expectations about attending college, and the potential influence of a savings program on shaping children's perceptions about paying for college. As part of a four-year study of a school-based college savings program called “I Can Save”, this paper uses qualitative evidence from interviews conducted in second and fourth grades with a diverse group of 51 children. Findings suggest that most of the children in the study have a general understanding of college and have begun a process of considering higher education. Further, children in “I Can Save” are more likely than a comparison group of children to perceive that savings is a way to help pay for college.

For many children, especially minority and low-income children, attending college is a genuinely desired but elusive goal. Research on aspirations and expectations may provide a way to understand the gap between what children desire and what they actually expect to happen. This study examines the potential role of Children's Development Accounts (CDAs) as a way to reduce the aspirations and expectations gap among at risk children using Panel Study of Income Dynamics (PSID) data. While the vast majority of children without a CDA aspire to attend college (80%), only 39% see it as a realistic possibility in their lives. That is an aspirations/expectations gap of 41 percentage points. Moreover, children with a CDA are nearly twice as likely to expect to attend college than children without a CDA. It appears that when the financing of college is perceived as being under children's own control, college attendance may become more of a reality. Children with a CDA are not only more likely to expect to attend college, they perform better in school. Having a CDA is associated with a 4.57 point increase in math scores. Moreover, findings suggest that children's college expectations act as a partial mediator between CDAs and children's math achievement.

This paper examines an innovative college savings program for public elementary school children. The project is based on the proposition that children will gain financial knowledge and be more likely to view college as an attainable goal because they are accumulating savings to help pay for higher education. As the latest in a long history of school-based savings programs, this program pioneers the idea of matched savings in which children and family savings in the students' accounts are matched one to one up to a maximum of $3000. Findings suggest that the principal, teachers, children, and their families are enthusiastic about the program. Saving patterns show that families can save, but low levels and patterns of saving suggest that structures that encourage regular saving might improve saving rates. The program successfully teaches financial education through an after-school club, but it has been more difficult to incorporate it into classroom teaching and to reach parents. Universal children's savings accounts may circumvent some of the limitations of this program, although more research is required to assess which program components would be the most effective in such a system.