Using Children’s Savings Accounts and Early Awards to Build College Savings among Welfare Recipients: The Case of Promise Scholars

ABSTRACT

Prior research indicates that welfare receipt negatively affects households’ planning and saving for offspring’s post-secondary education. Recently, a growing body of literature suggests that Children’s Savings Accounts (CSAs) are effective in increasing the saving rate of American households. Findings of this study suggests that welfare receipt is negatively associated with saving for college; Promise Scholars is positively associated with saving for college; and the effect of Promise Scholars on saving for college exists among welfare recipients. Research and policy implications are discussed.

KEYWORDS:

• Promise scholars
• children’s savings accounts
• asset-building
• welfare
• college planning

Highlights

• The odds of saving for college are 48% lower for welfare recipients than non-welfare-recipients.

• The odds of saving for college are 12.55% greater for Promise Scholars than for the comparison group.

• The effect of Promise Scholars is also found among welfare recipients, for whom the odds of saving for college are 9.41% greater for welfare recipients in Promise Scholars than the comparison group.

Acknowledgments

This research was supported by funding from the Wabash County Foundation, the Charles Steward Mott Foundation, and Poverty Solutions. These organizations are not responsible for the quality or accuracy of the paper, which is the sole responsibility of the authors, nor do they necessarily agree with any or all the paper’s findings and recommendations.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. To learn more about Promise Scholars, see Elliott et al. (2021).

Additional information

Funding

This work was supported by the Poverty Solutions; The Charles Steward Mott Foundation; Wabash County Foundation.