# Encouraging Early College Savings and Financial Planning ## expand\_more ## Key Issue Overview For many families, especially those with limited financial resources or experience navigating higher education costs, the prospect of saving and paying for college can feel overwhelming or out of reach. Early college savings and financial planning interventions aim to empower families and students to start preparing for college expenses well before high school, which can increase financial security and reduce barriers to college enrollment. In this section, we review the evidence on increasing participation in early college savings programs and planning, including studies that examine the use of state 529 college saving plans. 529 college savings plans are investment portfolios designed for families saving for college expenses. Enrolling and contributing to a 529 plan gives the money the chance to grow over time for college expenses. For example, a family who invests $200 per month starting when their child is in kindergarten will contribute approximately $30,000 to a 529 plan and could have nearly $50,000 available for college expenses by the time their child graduates high school, assuming a 6% annual return—a reasonable rate for a 529 plan. ### Research Evidence expand\_more These studies examine the impact of interventions designed to encourage college savings among families of students in grades 4 through 10. One study examines the impact of simplifying the enrollment process for a state-sponsored college savings plan (529 plan) and providing a small financial incentive for contributing ([Lon](https://scholar.harvard.edu/files/btl/files/long_bettinger_-_rct_to_increase_college_savings_2017-4-26.pdf)g & Bettinger, 2017), and the other offered small early financial awards to students and families tied to academic engagement and making regular contributions to their college savings account ([Elliot et al., 2023](https://www.mdpi.com/2227-7099/11/3/82)). Findings suggest that simplifying and supporting the process of opening a college savings account—particularly when paired with a financial incentive—can significantly increase the likelihood that families open an account and make regular contributions ([Long & Bettinger, 2017](https://scholar.harvard.edu/files/btl/files/long_bettinger_-_rct_to_increase_college_savings_2017-4-26.pdf)). While early financial incentives had no effects on students’ short-term academic outcomes overall, they may increase K-12 attendance among lower-income students ([Elliot et al., 2023](https://www.mdpi.com/2227-7099/11/3/82)). Together, these findings point towards the potential of early efforts to promote college savings and encourage financial planning among families. Promoting College Savings Among Families ## Promoting College Savings Among Families **What the Studies Tested:** - The studies tested whether interventions designed to promote and support early college savings and planning among students and their families influence behaviors such as opening a college savings account, saving regularly, academic performance, and college enrollment. While the two studies examined different approaches—one simplified the college savings account enrollment process and offered a small financial incentive ([Long & Bettinger, 2017](https://scholar.harvard.edu/files/btl/files/long_bettinger_-_rct_to_increase_college_savings_2017-4-26.pdf)), and the other provided early financial awards to students and families for academic engagement and regular contributions to college savings ([Elliot et al., 2023](https://www.mdpi.com/2227-7099/11/3/82))—both aimed to help families begin preparing for college costs early in their student’s educational journey. **What the Studies Found:** - The studies found that relatively small financial incentives and structured support can increase early college savings behaviors. In the [Long and Bettinger (2017)](https://scholar.harvard.edu/files/btl/files/long_bettinger_-_rct_to_increase_college_savings_2017-4-26.pdf) study, families that were offered simplified assistance and a $50 incentive were significantly more likely to open a college savings account and make automatic monthly contributions, though impacts on college enrollment were limited. The Early Award Scholarship Program (EASP) ([Elliot et al., 2023](https://www.mdpi.com/2227-7099/11/3/82)) did not impact Math, English, or attendance outcomes for the full sample of students, though it did improve school attendance for lower-income students. These results suggest that while early financial interventions may not impact immediate academic outcomes, they can encourage families to start planning and saving for college early and may improve school engagement for some students. *Click the dropdowns below to read summaries of each study included in the overall synthesis. Unless noted otherwise, all reported effects are statistically significant at the p<.05 level. Studies are linked (see author name and publication date). When available, we link an open access version of the study*. [Explore our methodology](/rc-methodology) Open all sections Close all sections ### Providing Assistance with and Initial Deposit for MA State 529 Plan (Long & Bettinger, 2017) expand\_more **Study: Simplification, Assistance, and Incentives: A Randomized Experiment to Increase College Savings** ([Long & Bettinger, 2017](https://scholar.harvard.edu/files/btl/files/long_bettinger_-_rct_to_increase_college_savings_2017-4-26.pdf)) **Intervention:** This study tested the effects of an intervention designed to help parents of 7th-10th 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. ### Early Award Scholarship Program (Elliot et al., 2023) expand\_more **Study: Early Award Scholarship Program Results in Improved Attendance and State Math Test Scores for Students from Lower-Income Households** ([Elliot et al., 2023](https://www.mdpi.com/2227-7099/11/3/82)) **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 8th 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).* ### Implementation Considerations expand\_more - **Assessing Family Awareness and Barriers**: Understand families’ current knowledge and attitudes towards early college savings. Are parents familiar with 529 plans or other savings options? What obstacles do families face in opening and contributing to savings accounts (e.g., lack of information, challenges with logistics of opening account, income constraints)? - **Providing Early and Targeted Financial Incentives:** Incentives can motivate families to start saving early. Are small financial bonuses or matching contributions feasible to encourage initial account opening or regular contributions? Tailor incentives to engage families from lower-income backgrounds who might benefit most. - **Partnering with Local Financial Institutions and Community Organizations:** Collaborate with banks, credit unions, nonprofits, or state agencies to expand support and incentives. Are there local partners who can provide expertise, outreach, or matching funds? Can these partnerships help reduce administrative burden on school staff by offering enrollment assistance or user-friendly tools that simplify the 529 account opening and funding processes? - **Embedding College Savings in Early Educational Experiences:** Coordinate early savings initiatives with ongoing advising and college knowledge programming. Do students and families see how saving connects to tangible college colleges? Could your district send reminders and encouragement to contribute at key milestones, such as Kindergarten and elementary school graduations, or even birthdays and holidays? - **Embedding Financial Planning Education in Early Grades**: Start financial literacy programming before high school to build long-term knowledge and habits. Does your curriculum integrate age-appropriate lessons on saving, budgeting, and the costs of college from elementary or middle school onward? Are resources about college costs and savings available for parents?