Social Work Commons^™

Policy Design For Child Development Accounts: Parents' Perceptions, Sondra Beverly, Jin Huang, Margaret M. Clancy, Michael Sherraden

Center for Social Development Research

In the SEED for Oklahoma Kids experiment, which features of Child Development Account (CDA) policy do study participants perceive as important for increasing the number of children who earn a college degree or trade school certificate? Which features do participants view as important for encouraging parents to save for their children’s postsecondary education?

This brief presents findings from a 2020 survey of parents in the experiment, when their children were about 13 years old. Results are for 1,666 parents (those whose children received the CDA in SEED OK and those whose children did not) and for subgroups defined by household …

Taking Child Development Accounts To Scale: Ten Key Policy Design Elements, Michael Sherraden, Margaret M. Clancy, Sondra G. Beverly

Center for Social Development Research

The United States subsidizes asset accumulation for middle- and especially high-income families through the federal income tax system. Low-income families are much less likely than high-income families to benefit from these policies. The vision for Child Development Accounts (CDAs) has been for a universal and progressive policy aimed at long-term asset building for all. Bringing CDAs to scale nationwide in a sustainable manner will require a national policy structure, so that all children can build assets. This brief aims to advance universal and progressive CDAs by identifying 10 key design elements that can be implemented and sustained at scale.

Statewide Child Development Account Policies: Key Design Elements, Margaret M. Clancy, Sondra G. Beverly

Center for Social Development Research

Child Development Accounts (CDAs) aim to build assets for postsecondary education. Unlike many asset-building programs, CDAs were explicitly conceived to be universal (every child is included) and progressive (greater support for disadvantaged children). Four states have created statewide CDAs—Baby Scholars in Connecticut, the Harold Alfond College Challenge in Maine, College Kick Start in Nevada, and CollegeBoundbaby in Rhode Island. In this policy report, we describe these CDAs to provide perspective and inform new initiatives. We begin by identifying 10 key CDA policy design elements originally modeled by the CDA in the SEED for Oklahoma Kids experiment. By modeling key design …

Start Lifelong Asset Building With Universal And Progressive Child Development Accounts, Jin Huang, Margaret S. Sherraden, Margaret M. Clancy, Michael Sherraden, Trina R. Shanks

Center for Social Development Research

This policy action statement was developed by members of the networks engaged in the Grand Challenges to Build Financial Capability and Assets for All and to Reduce Extreme Economic Inequality. The Grand Challenges initiative’s policy action statements present proposals emerging from Social Innovation for America’s Renewal, a policy conference organized by the Center for Social Development at Washington University in collaboration with theAmerican Academy of Social Work & Social Welfare, which is leading the Grand Challenges for Social Work initiative to champion social progress through a national agenda powered by science.

Do Savings And Assets Reduce Need-Based Aid For Dependent Students?, Margaret M. Clancy, Sondra G. Beverly

Center for Social Development Research

Federal programs such as Pell Grants provide financial aid for college according to need. Although the federal government is the principal source of need-based student aid, almost all states offer assistance. Rules governing student aid designate income as the primary indicator of ability to pay but assets are also considered. This policy brief documents the impact of assets on need-based aid for dependent students under current rules and formulas. The main observation is that savings and assets do not affect need-based aid for most dependent students. When assets count toward the EFC, savings held in 529 plan accounts have less …

The Early Positive Impacts Of Child Development Accounts, Sondra G. Beverly, Margaret M. Clancy, Michael Sherraden

Center for Social Development Research

This research brief highlights the findings of several studies from the SEED for Oklahoma Kids experiment, a large-scale policy test of universal, automatic, and progressive Child Development Accounts (CDAs). The universal and automatic components make the CDA in SEED OK inclusive by providing college accounts and savings to all treatment children. These studies primarily report the positive impacts of the CDA on nonfinancial outcomes (e.g., educational expectations, mother’s mental health, and child development). The impacts are often greater for disadvantaged children.

College Savings Plans: A Platform For Inclusive And Progressive Child Development Accounts, Margaret M. Clancy, Michael Sherraden, Sondra G. Beverly

Center for Social Development Research

College Savings Plans: A Platform for Inclusive and Progressive Child Development Accounts

Education Loans And Wealth Building Among Young Adults, Min Zhan, Xiaoling Xiang

Center for Social Development Research

This study examines the association between education loans and postcollege wealth accumulation among young adults. Data come from the 1997 National Longitudinal Survey of Youth, and the analyses control for a number of student characteristics, college experiences, and parental income. Results from a treatment-effect model indicate that having education loans upon leaving college is negatively related to postcollege net worth, financial assets, nonfinancial assets, and value of primary housing. Furthermore, having education loans also has a negative impact on the value of net worth among Black young adults. The relationship between the amount of education loans and wealth accumulation is …

Research Summary: Testing Universal College Savings Accounts At Birth: Early Research From Seed For Oklahoma Kids, Sondra G. Beverly, Margaret M. Clancy, Michael Sherraden

Center for Social Development Research

SEED for Oklahoma Kids is a large-scale policy test of automatic and progressive Child Development Accounts (CDAs), and it is the first truly universal model in the United States. The SEED OK CDA is universal in that it opens an Oklahoma 529 College Savings Plan (OK 529) account on behalf of every infant in the treatment group. This report summarizes key findings and conclusions from SEED for Oklahoma Kids research. Even at this early stage, SEED OK research is informing policy and the design of college savings plans at the state level. Amore recent summary of SEED OK research is …

Automatic Deposits For All At Birth: Maine's Harold Alfond College Challenge, Margaret M. Clancy, Michael Sherraden

Center for Social Development Research

The first statewide Child Development Account (CDA) in the United States announced a major change in strategy to automatically enroll all newborns. Evidence from CDA research has contributed to the decision by the College Challenge to remove its original opt-in requirement—in which parents must enroll their newborns in the state’s 529 college savings plan to receive a $500 grant—in favor of universal enrollment—in which every child is enrolled automatically at birth with a $500 grant.

Does Outstanding Student Debt Reduce Asset Accumulation?, William Elliott, Michal Grinstein-Weiss, Ilsung Nam

Center for Social Development Research

In this study, the authors use the Survey of Consumer Finances (SCF) to assess whether student loan debt is associated with total assets. They find that median 2009 assets for households with no outstanding student loan debt ($207,000) are higher than they are for households with outstanding student loan debt ($174,000). Multivariate statistics indicate that a household with a four-year college graduate, outstanding student loan debt, and median assets ($451,520) in 2007 had $136,73 (36%) less home equity in 2009 than a household with a similar household with no outstanding student loan debt. The main policy implication of this study …

Child Development Accounts And College Success: Accounts, Assets, Expectations, And Achievements, Sondra G. Beverly, William Elliott, Michael Sherraden

Center for Social Development Research

Child Development Accounts (CDAs) can contribute to financial preparation for college and the development of a college-bound identity in multiple ways and so increase the likelihood of college success. The pathways from CDAs to college success proposed in this paper are grounded in theory and evidence, but more research on the impact of CDAs is needed.

Relationships Between College Savings And Enrollment, Graduation, And Student Loan Debt, William Elliott Iii, Hyun-A Song, Ilsung Nam

Center for Social Development Research

Relationships Between College Savings and Enrollment, Graduation, and Student Loan Debt

Reducing Student Loan Debt Through Parents’ College Savings, William Elliott, Ilsung Nam

Center for Social Development Research

One policy rationale for promoting Child Development Accounts (CDAs) is that they may help reduce college debt, but no research provides evidence of this. Research does suggest that high-dollar student loans ($10,000 or more) can reduce the probability that lower income students in particular persist in and graduate from college. In this study, we find evidence to suggest that parents’ college savings may reduce the probability that students accrue high-dollar student loan debt across all income levels with the exception of high-income students. Based on this and evidence from separate research on small-dollar children’s savings accounts, we suggest that it …

Interviews With Mothers Of Young Children In The Seed For Oklahoma Kids College Savings Experiment, Karen Gray, Margaret Clancy, Margaret S. Sherraden, Kristen Wagner, Julie Miller-Cribbs

Center for Social Development Research

Interviews With Mothers of Young Children in the SEED for Oklahoma Kids College Savings Experiment

Early Program Enrollment In A Statewide Child Development Account Program, Jin Huang, Sondra Beverly, Margaret Clancy, Terry Lassar, Michael Sherraden

Center for Social Development Research

Early Program Enrollment in a Statewide Child Development Account Program

Socioeconomic Status And Early Savings Outcomes: Evidence From A Statewide Child Development Account Experiment, Sondra G. Beverly, Youngmi Kim, Michael Sherraden, Yunju Nam, Margaret Clancy

Center for Social Development Research

Socioeconomic Status and Early Savings Outcomes: Evidence From a Statewide Child Development Account Experiment

Are Child Development Accounts Inclusive? Early Evidence From A Statewide Experiment, Sondra G. Beverly, Youngmi Kim, Michael Sherraden, Yunju Nam, Margaret Clancy

Center for Social Development Research

A key objective of Child Development Accounts (CDAs) is to increase college completion rates among disadvantaged youth by helping families accumulate assets for college and by encouraging youth to see themselves as college bound. While the major asset-building programs in the United States largely benefit socioeconomically advantaged individuals, CDAs explicitly aim to facilitate account holding and asset accumulation by disadvantaged families. But do CDAs meet the goal of being inclusive? This research uses data from a large CDA experiment with probability sampling and random assignment to examine early CDA savings outcomes. Findings indicate that the CDA improves outcomes for several …

Do Child Development Accounts Promote Account Holding, Saving, And Asset Accumulation For Children's Future? Evidence From A Statewide Randomized Experiment, Yunju Nam, Youngmi Kim, Margaret Clancy, Robert Zager, Michael Sherraden

Center for Social Development Research

This study examines the impacts of Child Development Accounts (CDAs) on account holding, saving, and asset accumulation for children, using data from the SEED for Oklahoma Kids experiment (SEED OK). SEED OK, a policy test of universal and progressive CDAs, provides a 529 college savings plan account to every infant in the treatment group with automatic account opening and an initial deposit. SEED OK also encourages treatment participants to open their own 529 accounts with an account opening incentive and a savings match. Using a sample of infants randomly selected from birth records (N=2,70) and randomly assigned to treatment and …

Toward A Children's Savings And College-Bound Identity Intervention For Raising College Attendance Rates: A Multilevel Propensity Score Analysis, William Elliott Iii, Gina Chowa, Vernon Loke

Center for Social Development Research

It has been suggested that children’s savings programs will be more effective if they are combined with strategies to build children’s college-bound identities. In this study we use a multi-level treatment approach to propensity score analysis to test this proposition. Findings suggest that children who have savings and are certain they will graduate from a four-year college are more likely to attend college than their counterparts. Given this, we suggest that children’s savings policies designed to increase college attendance rates will be more effective if they include strategies for building children’s college-bound identity and college-bound identity programs will be more …

A Process Model Of Children's Savings Indirect Effects On College Progress, William Elliott Iii, Ilsung Nam, Toni Johnson

Center for Social Development Research

In addition to direct effects that accompany owning savings, asset researchers hypothesize that savings also has indirect effects. However, theory and research on the psychological effects of assets are in their early stages of development. One promising area of theoretical and research inquiry is the study of college expectations as an explanatory mechanism for the relationship between assets and children’s educational outcomes. However, little theory has been developed about how assets may influence college expectations. a recent study uses Identity-Based Motivation (IBM) theory to explain the indirect effects of assets. There are three core components of IBM: (1) salience, (2) …

College Savings Match Programs: Design And Policy, Terry Lassar, Margaret M. Clancy, Sarah Mcclure

Center for Social Development Research

We examine here the essential elements and program design of all state 529 savings-match programs as well as the application process and other policy considerations. Like other state programs, 529 savings incentives inevitably reflect the unique demographics, economics, and political makeup of a particular state. This report provides details about inclusive savings-match program features and strategies that could make 529 plans more widely accessible to families of all incomes.

The Age Old Question, Which Comes First? A Simultaneous Test Of Children's Savings And Children's College-Bound Identity, William Elliott Iii, Eun Hee Choi, Mesmin Destin, Kevin Kim

Center for Social Development Research

The Age Old Question, Which Comes First? a Simultaneous Test of Children's Savings and Children's College-Bound Identity

Direct Effects Of Assets And Savings On The College Progress Of Black Young Adults, William Elliott Iii, Ilsung Nam

Center for Social Development Research

Direct Effects of Assets and Savings on the College Progress of Black Young Adults

Reducing The College Progress Gap Between Low- To Moderate-Income (Lmi) And High-Income (Hi) Young Adults: Assets As An Understudied Form Of Economic Capital, William Elliott Iii, Monique Constance-Huggins, Hyun-A Song

Center for Social Development Research

Reducing the College Progress Gap Between Low- to Moderate-Income (LMI) and High-Income (HI) Young Adults: Assets as an Understudied Form of Economic Capital

Reducing The College Progress Gap Between Low- To Moderate-Income (Lmi) And High-Income (Hi) Young Adults, William Elliott Iii, Monique Constance-Huggins, Hyun-A Song

Center for Social Development Research

College progress identifies young adults who are “on course,” that is, those who are currently enrolled in, or who have a degree from, a two-year college or a four-year college. However, little is known about the impact of these factors on low-to-moderate-income (LMI) young adults. Findings suggest LMI young adults with school savings are two and half times more likely to be on course than LMI young adults without savings. Policies such as universal Child Development Accounts (CDAs) that can help adolescents accumulate savings may be a simple and effective strategy for helping to keep LMI young adults on course.

The Age Old Question, Which Comes First? A Simultaneous Test Of Children's Savings And Children's College-Bound Identity, William Elliott Iii, Eun Hee Choi, Mesmin Destin, Kevin H. Kim

Center for Social Development Research

This study has three goals: (1) to provide an extensive review of research on the assets/expectation relationship, (2) to provide a conceptual framework for how children’s savings effects children’s college-bound identity (children’s college expectations are a proxy for children’s college-bound identity), and (3) to conduct a simultaneous test of whether owning a savings account leads to college-bound identity or college-bound identity lead to owning a savings account using path analytic technique with Structural Equation Modeling (SEM). Our review reveals asset researchers theorize about college-bound identity in two distinct but compatible ways: college-bound identity as a “linking mechanism," and college-bound identity …

Saving For College: A Policy Primer, Margaret M. Clancy, Terry Lassar, Krista Taake

Center for Social Development Research

To help address the rapidly rising cost of higher education—an obstacle to college access and completion for many low- and moderate-income families—it is increasingly important to save for college. This report highlights key policy considerations and challenges, along with specific strategies, to make 529 college savings plans more accessible to families of all incomes.

Saving For Post-Secondary Education In American Indian Communities, Amy Locklear Hertel, Mary Elizabeth Jäger

Center for Social Development Research

Saving for Post-Secondary Education in American Indian Communities

The Basics Of Progressive 529s, Center For Social Development

Center for Social Development Research

The Basics of Progressive 529s