Lessons from School-Based Children’s Savings for College Programs in Texas

//Lessons from School-Based Children’s Savings for College Programs in Texas

Children’s Savings Accounts (CSAs) for College offer a promising strategy to get more Texas students to college and help students and parents build financial skills. CPPP and RAISE Texas have made several advances over the past five years to develop a model to expand access to CSAs, particularly in kindergarten through 8th grade alongside Texas’ mandated financial education curriculum.

In the 2015-16 school year we worked with several partners to conduct a feasibility study to test and learn from our approach.  The studies, which involved Kindergarteners and 4th graders in Richardson and Pflugerville ISDs, gave students the opportunity to open a CSA as they learned about college and savings through four financial education lessons.  A financial institution partner deposited $25 into students’ accounts when they opened a CSA and had the opportunity to earn a match of $25-$50 on deposits they made into the account over the school year. 

Feasibility Study Findings

While nearly all of the teachers and parents provided favorable feedback about the program, there was lower than anticipated enrollment in the CSA program. This limited a conclusive evaluation of the research questions and the potential impact of a school-based CSA program.  However, the new evaluation report offers valuable implementation insights:

  • CSAs are an important teaching and parent engagement tool  Teachers reported that the CSA brought the concept of saving for the future to life for students and led to conversations about saving money for college between students and their parents.
  • Families used the college savings accounts – Half of account openers in Richardson and nearly three quarters of account openers in Pflugerville made at least one deposit into their account during the school year. 
  • The program’s financial education lessons are effective –Pilot students in Pflugerville, Texas who took surveys before and after the program showed substantial gains between pre- and post-test scores in both financial knowledge (45 percent improvement in knowledge score) and savings and banking attitudes (13 percent improvement in attitude score) as a result of the program lessons.  While all students showed these gains, there were no significant difference in gains between students in the schools that had an opportunity to open a CSA and the control schools (who did not have an opportunity to open a CSA). 

While students that opened a CSA in the treatment schools showed greater gains in financial knowledge than students that did not open an account in the treatment schools, these differences were not statistically significant. The inability to detect statistically significant differences was limited by low CSA participation.   

  • Families face multiple barriers to opening a CSA.  These barriers included parent skepticism about the program and not having time to go to a bank or school to open an account.
  • Families found the program materials and steps to enrollment too complex.  Some families reported that they were confused about the program and what steps they needed to take to open an account.
  • In-person parent program presentation is important to enrollment – The in-person program presentation helped parents become comfortable with opening CSA accounts.  While many of the account openings happened at these meetings, most parents did not attend them.

For more detail about these findings and other implementation findings, please see pages 21-25 of the evaluation report.

CPPP and RAISE Texas to Advance Custodial CSA Program Model to Ease Enrollment Obstacles to Opening Children’s Savings Accounts

Given the barriers families faced to open a children’s savings account in recent pilot programs in Richardson and Pflugerville ISDs, we are now working to advance a custodial program model that will automatically open accounts for all participating students.  We are currently assisting a few communities who are in the planning stages of launching school-based custodial account programs. To receive updates about CPPP and RAISE Texas’ children’s savings work or if you are interested in starting a children’s savings account for college program in your community contact Laura Rosen at rosen@cppp.org or Lauren Gates at lgates@raisetexas.org.

Laura Rosen joined the Center for Public Policy Priorities in 2010. She is a policy analyst and the coordinator of OpportunityTexas, a joint initiative of RAISE Texas and CPPP to expand household savings in Texas. Laura completed her Master of Public Policy from the University of Michigan in 2010 and received a Bachelor of Business Administration in Finance from the University of Texas at Austin in 2004. Before returning to graduate school, Laura worked as a relationship manager at Wells Fargo and was a Fulbright Scholar in Peru, where she researched microfinance. Laura also serves on the Texas Financial Education Endowment’s Grant Advisory Committee.

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