Designated Education Accounts Can Lead Students to College

To the Editor:

Last summer, Richard D. Kahlenberg highlighted the ways higher education magnifies, rather than mitigates, inequities in U.S. society, and outlined steps to reverse divergent trends in educational outcomes for low- and high-income students (“Magnifying Social Inequality,The Chronicle, July 2, 2012). Our work at the at the University of Kansas School of Social Welfare’s Assets and Education Initiative points to another promising strategy for promoting equality of opportunity for economically-disadvantaged students: creating a parallel system of asset accumulation—specifically, college accounts—to that which encourages college attainment in upper-earning families.

Disturbingly, our current financial-aid system, which relies heavily on loans, may actually discourage some of our most highly-qualified disadvantaged students. In contrast, asset-accumulation strategies, especially savings dedicated for education, change expectations and behavior. Evidence suggests that even small-dollar accounts make a difference in educational outcomes, especially for low-income students who, as Mr. Kahlenberg points out, face disadvantages at points throughout their academic careers. Even controlling for household income, a child with designated education savings from $1 to $499 is over four-and-a-half times more likely to graduate from college than a child with no account, as assets shape a college-saver identity that, in ways we are still discovering, replicates psychological advantages wealthier students enjoy. Having money in the bank makes students more likely to realize their high ambitions, keeping them on course even as obstacles threaten their progress.

In addition to the policy changes Mr. Kahlenberg suggests—including more need-based scholarships and better offerings at community colleges—we should pursue innovations currently like the U.S. Department of Education’s college-savings demonstration, which is part of the Gaining Early Awareness and Readiness for Undergraduate Programs program. We should also pursue programs begun in localities around the country, like San Francisco and Cuyahoga County, Ohio.

The Chronicle’s attention to growing inequities in higher education underlines the truth: We all have a collective interest in addressing barriers to higher education for students in poverty. As we dedicate ourselves to crafting an educational system worthy of our ideals, children’s savings programs should be part of a new financial-aid strategy better suited for the 21st century. An asset-based financial-aid system may provide all of its children with the same assurance that upper-income children receive—that college is paid for—helping to ensure that parents’ low incomes don’t sentence students to constrained educational outcomes and that our education financing doesn’t sentence us to a two-tiered academic system.

Terri Friedline
Assistant Professor
School of Social Welfare
University of Kansas
Lawrence, Kan.

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