Posted 6/3/2013 12:00 am
Even a very small college fund is associated with a significant increase in the likelihood that a child will enroll in and complete college, according to research by the Assets & Education Initiative at the University of Kansas.
The research found that even savings totals that would do little to alleviate the challenge of paying for college — amounts of $500 or less, even less than $1 — were associated with higher enrollment and completion rates.
“Obviously, these small amounts of money do not make a huge difference in students’ actual college financing, but they may help students see themselves as people who go to college — what is often called a ‘college-bound identity,’” researcher William Elliott wrote in the winter 2012-13 issue of Bridges, a publication of the Federal Reserve Bank of St. Louis.
“Just opening an account and designating some of that money for higher education may turn college into an important goal rather than just a dream, with a strategy for how to overcome cost barriers.”
Correlation of Savings Accounts with Educational Outcome
|Savings Account||Enroll in College||Graduate From College |
|School-designated savings of $500+||72%||33%|
|School-designated savings of $1-499||65%||25%|
|School-designated savings of <$1||71%||13%|
|Savings, but not designated for college||49%||8%|