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Changing the Odds for Children

“There is a difference between helping children beat the odds and actually changing the odds for all kids.” Karen Pittman of the Forum for Youth Investment made that powerful statement at the beginning of her keynote address at the Promise Net 2017 conference on November 6. While Children’s Savings Account (CSA) programs and College Promise programs take different approaches, both types of programs have the potential to change the odds for children from low-income families. And that potential only multiplies when these programs are linked together. 

CSAs are long-term savings or investment accounts that provide incentives to help children (ages 0-18) build savings for postsecondary education. College Promise programs commit to funding postsecondary education (either fully or partially) for every eligible student in a community, city or state. For example, the Pittsburgh Promise provides a last-dollar scholarship for attending any accredited postsecondary institution in Pennsylvania to students who attend Pittsburgh Public Schools from 9th grade on and graduate high school with at least a 2.5 GPA and 90% attendance record.  

The CSA and College Promise fields started around the same time in the early 2000s and developed in similar ways. Both spread from the grassroots, with local communities inspired by early adopters to create their own programs. And the organic nature of this growth means that, while local programs share the same core features, the design elements and even the intended impact differ across programs. 

Both fields are now at a key inflection point. They are moving beyond figuring out the mechanics of operating programs to deeper questions around impact—e.g. understanding what the programs are accomplishing, who they are serving and not serving and where they might be falling short. That makes this the perfect time to think through how Promise and CSA programs can be linked together to create a more powerful model, one in which the limitations of one program are addressed by the strengths of the other.  

CSA and Promise programs complement one another in a number of ways: 

  • Making the Promise tangible at a young age: The benefits of Promise programs accrue when young people attend postsecondary education. However, many children from low-income families never get to point of considering college, because it doesn’t seem attainable from a young age. By starting early—often at birth or kindergarten—and putting real dollars in an account, CSAs can make the promise of postsecondary education more tangible for children. Having a CSA can help foster a college-bound identity, in which children see themselves as someone who will go to college. This puts kids on track to benefit from the Promise program later on. 

  • Increasing college affordability: The amounts accumulated in CSAs are generally relatively small, since program incentives are modest and low-income families may only be able to make small contributions. On the other hand, Promise programs often cover a large part or even all tuition and fees left over after financial aid is applied. This can make postsecondary education affordable for students from low-income families and decrease the amount of student loans they need to take out. 

  • Covering gaps after the Promise: While CSAs may not be enough to cover tuition, they can play an important role in covering any gaps after financial aid and Promise funds are applied. CSA programs can be designed flexibly to allow students to use the funds for housing, transportation to school, books and other living expenses that are necessary for students to successfully complete their education.  

  • Building wealth and assets after graduation: Research indicates that having an account in youth increases the likelihood of a young adult having a savings account, credit card, stocks and bonds. Coupled with a reduction in student debt because of a Promise scholarship, these two programs could better position young adults to build wealth and assets after graduation.   

A few cities—such as Oakland, California and Lansing, Michigan—are combining CSA and Promise elements together, and a number of other Promise programs are considering adding a CSA component. Expanding these combined CSA/Promise models will make postsecondary education attainable for more young people, help set young adults up better for financial success after graduation, and improve the odds that more children will grow up to achieve financial stability, wealth and prosperity.