Stay Informed!

By Sean Luechtefeld on 12/20/2011 @ 09:30 AM

Tags: Children's Savings Accounts, Financial Empowerment, Recommended Reading

A young person’s success in going to and graduating from college depends, at least in part, on the wealth of their family. This information has long been known, and for years has served as the rationale behind CFED’s Asset Building for Children (ABC) work.

Yet the full extent to which family wealth influences educational attainment is something the assets field continues to grapple with. While a good deal of research is out there to support these claims, emerging evidence suggests that we have yet to understand just how intimately linked educational attainment and family wealth really are.

This is the main contention put forth in a recent report released by Pew Charitable Trusts’ Economic Mobility Project. The report, Housing Wealth and Higher Education, reveals just how important assets can be in propelling the children of low- and moderate-income parents toward a college diploma.

While I can’t do justice to 40 pages of robust research findings in a few short paragraphs, I’ll at least share a few important (and chilling) data points from the report:

1. During the housing boom – a time when families were experiencing historically large increases in overall wealth – enrollment at four-year public accredited universities increased nearly 25 percent.
2. For every $10,000 increase in home equity, the likelihood of enrolling in college increased six percent.
3. Whereas college enrollment among families who earned more than $70,000 per year was relatively unchanged pre- and post-housing boom, enrollment increased significantly among families earning less than $70,000 annually, suggesting that low- and moderate-income children are especially likely to benefit from efforts to help families build assets.

Unfortunately, a great deal of opposition to CSAs has punctuated the federal policy landscape. But, that can be changed if we all have the right tools needed to craft an eloquent defense. Reports like this one are just what we need in our toolkits, and we are immensely thankful to the Economic Mobility Project for sharing this tool with us.

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