We Save, We Go to College

Policy Paper
Jan. 19, 2012

“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.

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. 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.

Click here to read the entire report.

Report I in the series, Why Policymakers Should Care about Children's Savings, is available here.

Report II in the series, Does Structural Inequality Begin with a Bank Account? is available here.