Rising student loan burdens, escalating wealth inequality, and a pervasive sense that the American Dream of financial security and economic mobility are slipping beyond the grasp of many Americans have led Americans to question the previously unassailable: whether higher education is still ‘worth it’ in today’s economy. While research suggests that these fears are mostly unfounded—those who go to college are still usually better off than those who don’t—it is increasingly clear that the way in which we finance education, particularly our growing reliance on student borrowing, may be undermining higher education as a catalyst of economic mobility and engine of greater equality. Instead of delivering on the promises made to American children, that their efforts and ability will determine their outcomes, education financing may contribute to the chasm that separates the advantaged and the disadvantaged, reinforcing patterns of privilege. This analysis is fueling calls for a revolution in financial aid, meaningful alternatives to student loans, and policies to close the wealth gap, particularly that which fractures along racial lines. Convergence around the need for fundamental change often stops short, however, of outlining a 21st Century financial aid system, one that complements children’s efforts, improves outcomes, amplifies returns, and aligns with American values.
Children’s Savings Accounts (CSAs) may be just such a policy intervention. Research has demonstrated that CSAs work on multiple dimensions—early preparation, college access and completion, and post-college financial well-being—to improve children’s outcomes, and that effects may be particularly strong for disadvantaged students. This analysis suggests that CSAs have potential to foster equity in higher education and to restore its mobility functions, in service of the viability of the American Dream. As the nation turns a new page, there is a moment of opportunity for a new paradigm in financial aid and an urgent need to consider the role of Children’s Savings Accounts in the educational, economic, social, and political contexts. This is the purpose of a CSA symposium organized by the Center on Assets, Education, and Inclusion at the University of Kansas, in partnership with Washington University’s Center for Social Development. The symposium, November 9-11, 2016, at the Oread Hotel on KU’s Lawrence campus, brings together leading CSA practitioners, policymakers, advocates, and scholars, as well as those whose work in economic mobility, financial aid, financial services, or higher education intersects with CSA scholarship. Speakers and invited attendees will consider the latest CSA evidence, new findings related to student debt’s effects on return on college degrees, and opportunities to situate CSAs within current policy streams.
“Americans need more from our financial aid system than just a way to confront the immediate task of paying the tuition bill,” said Willie Elliott, AEDI Director and noted expert on student debt and asset-based alternatives. “When we insist on financial aid policies that equip children for success, create the conditions for equitable outcomes, and facilitate lifelong economic well-being—the true motivation of most college-goers—asset approaches such as CSAs perform far better than reliance on student debt. Growing recognition of this calculus, from many quarters of society, makes changes to U.S. financial aid policy likely. This is a crucial moment, then, in which revolutionizing our approach could pave a path to prosperity for generations to come.”
The symposium will feature recent research on CSA outcomes from high-profile programs such as San Francisco’s Kindergarten-to-College, SEED for Oklahoma Kids, Maine’s Harold Alfond College Challenge, Promise Indiana, and New Mexico’s Prosperity Kids. Respected scholars in the fields of economics, higher education, and economic mobility will consider the threats to the American Dream posed by rising student debt and dramatic wealth inequality. The symposium is scheduled to begin on Wednesday evening, November 9th, with a keynote address by Michael Sherraden, a thought leader in the field of institutional asset building and one of Time Magazine’s 100 Most Influential People. Panels on Thursday, November 10th, will include Tom Shapiro, a noted expert on racial wealth inequality; Bob Annibale, Global Director of Citi Community Development; Ray Boshara of the Federal Reserve Bank of St. Louis; and national leaders in efforts to cultivate financial capability through early experiences with financial institutions, including AEDI Faculty Director of Financial Inclusion and Assistant Professor in the KU School of Social Welfare, Dr. Terri Friedline. One panel Thursday will highlight new research from AEDI that quantifies student debt’s effects on how long it takes a college graduate to reach the median of the U.S. income and wealth distributions—a measure of having ‘made it’ in our economy. Moderated by Missouri State Treasurer Clint Zweifel, Thursday evening’s discussion will explore new initiatives in Kansas City, Indiana, and the Bay Area to integrate scholarship programs and CSAs, while Friday’s agenda centers on new research evidence on CSAs’ potential to improve educational outcomes, close achievement gaps, and equip families with robust asset bases from which to finance equitable chances at better futures for their children.
Keynote speakers and leading panelists will be available to speak with media by request on Thursday and Friday of the symposium. For more information on the symposium, research, presenters and registration, visit http://aedi.ku.edu/upcoming-event.