Why Policymakers Should Care about Children's Savings

“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 I presents a case for why policymakers should care about promoting savings, especially among children from lower income families. The report presents evidence on the relationship between children’s savings and college success and provides the context for a broader discussion of designing children’s savings policies and ensuring that they offer children a meaningful financial stake in college.

Click here to read the entire report.