Encouraging Early College Savings and Financial Planning

Study: Simplification, Assistance, and Incentives: A Randomized Experiment to Increase College Savings (Long & Bettinger, 2017)

Intervention: This study tested the effects of an intervention designed to help parents of 7^th-10^th graders better understand and plan for college expenses. Families were randomly assigned to one of two treatment groups or a control group. The first treatment group received information about Massachusetts’s 529 College Savings Plan and assistance with a simplified, on-site enrollment process. Families in the second treatment group received this same information and enrollment assistance, along with a $50 deposit to cover the minimum amount required to open the account. Families in the control group received general information about college savings options.

Context: 

• The study sample included 974 families with children enrolled in Boston Public Schools in grades 7-10. The intervention was implemented in 2012 and 2013, with outcomes measured up to four years post-intervention.
  • The sample was racially and economically diverse, with over half of families identifying as non-White (47% Black, 18% Asian, 12% Hispanic) and a wide variation in family income.

Research Design: Randomized Controlled Trial

Findings: Findings represent effects of each treatment relative to the control condition. Since the sample included families of 7-10 graders, not all students had graduated high school by the time the final outcomes were measured (3-4 years after the treatment), so the college enrollment outcomes represent a subset of the full sample. Assistance Treatment: families who received information about Massachusetts 529 College Savings plan and on-site assistance with a simplified enrollment process Assistance + Incentive Treatment: families received everything in the assistance treatment + $50 incentive to cover the minimum amount required to open an account.  

• College savings plan take-up:
  • Assistance Treatment: No effect
  • Assistance & Incentive Treatment: 22 percentage points more likely to open a 529 College Savings Account after the workshop.
• Signing up for automatic monthly contributions
  • Assistance Treatment: No effect.
  • Assistance & Incentive Treatment: 7 percentage point increase in signing up for automatic monthly contributions.
• Amount saved in 529 plan (as of July 2016)
  • Assistance Treatment: +$1,720-$1780 average 529 balance.
  • Assistance & Incentive Treatment: +$1,895-$2,055 average 529 balance.
• Enrolled in college (as of Fall 2016)
  • Assistance Treatment: No effect
  • Assistance & Incentive Treatment: 7 percentage point decrease in two-year college attendance
• College choice, conditional on college enrollment (as of Fall 2016)
  • Assistance Treatment: No effect.
  • Assistance & Incentive Treatment: 11 percentage point decrease in likelihood of attending two-year college and 8 percentage point increase in likelihood of attending a four-year college. 

Study: Early Award Scholarship Program Results in Improved Attendance and State Math Test Scores for Students from Lower-Income Households (Elliot et al., 2023)

Intervention: Enrollment in the Early Award Scholarship Program (EASP), formally known as Promise Scholars. Developed by a community organization, The Community Foundation of Wabash County in Indiana, EASP offers early financial awards to students in grades 4 through 8 that can be used for future college or career education. Students and their families can earn awards by participating in eligible activities focused on three areas: (1) learning (e.g., goal setting, completing assignments), (2) saving (e.g., providing some matching funds for families contributing at least $20/month into their CSA), and (3) college preparation (though these activities were predominately targeted to 8^th graders and their families).

Context: The sample for this study included 1,174 students who were in grades 4 through 6 during the first year of the intervention in 2016-17. To test the effect of EASP, students who participated in the program were compared to their peers who did not enroll in EASP. The study period was for two years, during the 2016-17 and 2017-18 school years.

• The sample is predominately White (89%), with a large proportion of students receiving free- or reduced-price lunch (53%). 

Research Design: Inverse-Propensity Weighting (IPW)

Findings:

• For the full sample, there were no effects of the intervention on outcomes measured, which included ELA and Math test scores and school attendance. 

Subgroup Findings: 

• For students from lower-income families, participation in EASP led to a small improvement in school attendance (measured as a decrease in missed instructional time).