Saving and Educational Asset Building Within a Community-Driven CSA Program: The Case of Promise Indiana

Abstract

Children's savings accounts (CSAs) provide early asset-building opportunities to reduce disparities in children's outcomes, particularly regarding postsecondary education and financial well-being. Promise Indiana (PI) is a state-supported and community-driven CSA program for children in kindergarten through third grade. This study used a mixed methods approach to better understand savings behaviors and perceptions among PI participants. Administrative data showed a substantial 60 percent uptake of 529 savings accounts in the first year. Forty-five percent of PI accounts had deposits from family or champion funds, with an average account balance of $270. These findings suggest that PI is contributing to college savings rates in the 529 plan that exceed what would otherwise be expected for families of young children. Further, results from parental interviews suggested PI activated key components of the identity-based motivation framework, enabling individuals to assert and act on a vision of themselves as someone who saves for college.