We Save, We Go to College. Creating a Financial Stake in College: Report III of IV
Author: Elliott, William, III
Date: 2012-01-00
Type: Reports - Evaluative
Subjects: Banking,Money Management,Ownership,College Attendance,Children,Low Income Groups,Economically Disadvantaged,Academic Aspiration,College Bound Students,Academic Persistence,Racial Differences,Gender Differences,Socioeconomic Status,Marital Status,Parent Background,Educational Attainment,Motivation,Theories

"Creating a Financial Stake in College" is a four-part series of reports that focuses on the relationship between children's savings and improving college success. This series examines: (1) why policymakers should care about savings, (2) the relationship between inequality and bank account ownership, (3) the connections between savings and college attendance, and (4) recommendations to refine children's savings account proposals. This series of reports presents evidence from a set of empirical studies conducted by Elliott and colleagues on children's savings research, with an emphasis on low-income children, relevant to large-scale policy proposals. One such proposal, The ASPIRE Act, would encourage savings by opening an account for every newborn child, seeding the account with an initial deposit and progressively matching contributions, and designating accumulated resources to support post-secondary education or other targeted uses such as homeownership or retirement. Collectively, these reports build on the compelling observation that children with savings in their name are given a stake in their future. As such, they are more inclined to take control over their educational experience and feel more empowered to attend college and persist through graduation. Report III presents additional evidence of a link between savings and children's college progress. College progress is conceptualized here as students being "on course" for achieving the American Dream via the education path. "On course" is operationalized as being enrolled in or having graduated from a two-year or four-year college by age 23 (see Elliott & Beverly, 2011a). This report offers evidence of the role children's savings plays in reducing "wilt". Wilt occurs when children who have not yet graduated from high school, but who expect to graduate from college sometime in the future, are not currently enrolled and have not graduated from college shortly after high school. Thus, these children "wilt" due to lack of resources as a growing plant loses vitality due to lack of sun and water. If children who expect to graduate from college are more likely to actually attend college when they have savings, we can consider financial barriers rather than a lack of desire as a critical barrier in the path to a college degree. In a very basic way, having savings changes the way children think about college. Using a college-bound identity theory of asset effects first articulated by Elliott, Choi, Destin and Kim (2011) and further developed by Elliott, Nam, and Johnson (2011), this report suggests that institutions provide (1) important contextual cues that bring the college-bound identity to the forefront of the mind, (2) an embedded thought process including strategies for overcoming difficulty, and (3) power over resources. Appended are: (1) Methods for Table 1; and (2) Research that Includes Children's Savings and College Expectations. (Contains 1 table and 4 footnotes.) [For related reports, see "Why Policymakers Should Care about Children's Savings. Creating a Financial Stake in College: Report I of IV" (ED540300); "Does Structural Inequality Begin with a Bank Account? Creating a Financial Stake in College: Report II of IV" (ED540299); and "Ideas for Refining Children's Savings Account Proposals. Creating a Financial Stake in College: Report IV of IV" (ED540297).]