Biannual Report on the Asset and Education Field

Biannual Report on the Asset and Education Field

ong>Biannualong> ong>Reportong> on the Asset and Education FieldBuilding Expectations, Delivering Results:Asset-Based Financial Aid and the Future of Higher Education Chapter 4 (Brief): From Disadvantaged Student to College Graduates: The Role of CSAsBy William Elliott and Emily Rauscher

Chapter 4 - Brief FROM DISADVANTAGED STUDENTS TO COLLEGE GRADUATES: THE ROLE OF CSASBY WILLIAM ELLIOTT AND EMILY RAUSCHERMinority and low-income children have many of the same aspirations for college as more advantaged children,but their enrollment and completion rates lag. This contradiction between high expectations and constrainedachievement provides one of the more vivid illustrations of failure of the education path to act as the greatequalizer. Addressing the educational challenges facing disadvantaged children will require innovations that cancreate greater equality of opportunity, such that their innate talents and academic effort translate into meaningfulaccess to college. Evidence points to differences in asset accumulation as part of the key to explaining educationalgaps. Children’s savings for school, even at very low levels, may empower low-income high school graduates toenter and succeed in college. Some of these effects may be a result of children’s changed engagement withinstitutions, which they see as supportive of their aspirations and consistent with their normative expectations.Children’s Savings Accounts (CSAs) can be a step toward changing the educational trajectories of disadvantaged,but talented, children in the U.S.Bridging the chasm between hopes and reality: CSAs and the expectation paradox• About 52% of low-income and 82% high-income children enrolled in a two-year or four-year collegeimmediately upon graduating high school in 2010. 1 Even bigger gaps exist when considering collegegraduation rates. Children from high-income families are six times more likely than children from lowincomefamilies to complete a bachelor’s degree by age 25. 2• The gaps are most vivid when comparing students with similar achievement levels, but different incomes.Low-achieving children from high-income families attend college at a much higher rate than lowachievingchildren from low-income families (65% vs. 33%, respectively). Similarly, 88% of highachievingchildren from high-income families attend college while only 69% (a similar percentage aslow-achieving, high-income children) of high-achieving children from low-income families attendcollege. 3• These ‘lost college students’ represent missed opportunities. In the 1990s, between 1 and 1.6 millioncollege-qualified high school graduates did not earn a bachelor’s degree; between 1.4 and 2.4 million willbe lost in this decade. 4Wilt: Impact of financial constraints on college attendance• Over 80% of non-college-goers identified financial aid as “extremely” or “very” important in theirdecision not to enroll in college. 5 Additionally, even more generous provision of financial aid at the pointof enrollment may not be adequate to reverse these effects; because reduced expectations of college1 Aud, S., Hussar, W., Johnson, F., Kena, G., Roth, E., Manning, E., Wang, X., and Zhang, J. (2012). The Condition ofEducation 2012 (NCES 2012-045). U.S. Department of Education, National Center for Education Statistics. Washington,DC. Retrieved May 4, 2013 from Bailey, M. J., and Dynarski, S. (2011). Inequality in postsecondary education. P. 117-132 in G. Duncan and R. Murnane(Eds.), Whither opportunity? New York, New York: Russell Sage Foundation.3 ACSFA. (2010). The rising price of inequality: How inadequate grant aid limits college access and persistence. RetrievedJuly 15, 2011, from Advisory Committee on Student Financial Assistance Ibid.5 Hahn, Ryan D., & Price, Derek V. (2008). Promise lost: College-qualified students who don't enroll in college (pp. 1-44).Washington, DC: Institute for Higher Education Policy.1

Chapter 4 - Brief attendance shape college preparation, students’ financial worries may lead to failure to apply to college orfor financial aid or to take requisite college entrance exams or preparatory coursework.• Studies confirm that socioeconomic status plays a role in determining which talented students fail toattend college after leaving high school. 6 ACSFA found that 70% of low-income, college-qualifiedchildren planned in 10th grade to enroll in college, but only 54% actually enrolled upon graduating fromhigh school. 7• When students are talented and academically prepared enough to go to college but fail to enroll, they canbe said to have experienced ‘wilt’. There is evidence that having assets, especially when those savings arededicated for college, can help to protect against wilt. Conversely, lack of savings can reduce evencollege expectations prior to high school graduation; more than 80% of children who have school savingsas adolescents expect to graduate from college, compared to 64% of children with no account. 8• Savings reduce wilt, and these effects are seen even at very low levels of savings. 9 However, the amountof savings matters; higher percentages of children expect to graduate from college as savings amountrises. 10• Savings not only increase college expectations, though; school savings, in particular, are associated withsuperior academic outcomes in college, as well.o Having school savings as a child improves the chances that low-income and black children enrollin college. A low- to moderate-income or black child who has school savings of $1 to $499 priorto reaching college age is about three times more likely to enroll in college than a black child withno savings account. 11Enrollment is only the beginning: Inequalities deepen after college enrollment• Disparities in college completion rates exist by parental income, parental education, cultural and socialcapital, mental and physical health, family structure, and academic preparation. In addition to theseinequalities, a relatively recent line of research shows that assets—more unequally distributed thanincome 12 —are also important for college graduation.• When it comes to both determining the likelihood of college attainment and, subsequently, reaping theeconomic and social benefits of the degree, not all higher education is created equal. The type ofinstitution a student attends—e.g., two- or four-year, private or public, selective or non-selective, and6 Trusty, J., and Harris, M. B. C. (1999). Lost talent: Predictors of the stability of educational expectations acrossadolescence. Journal of Adolescent Research, 14(3), 359-382.7 ACSFA. (2006). Mortgaging our future: How financial barriers to college undercut America's global competitiveness (pp.1-63). Washington, DC: Advisory Committee on Student Financial Assistance.8 Elliott, W., and Beverly, S. (2011b). The role of savings and wealth in reducing "wilt" between expectations and collegeattendance. Journal of Children and Poverty, 17(2), 165-185.9 Elliott, W., Song, H-a, and Nam, I. (2013). Small-dollar children’s saving accounts and children's college outcomes byincome level. Children and Youth Services Review, 35 (3), p. 560-571.10 Elliott, W., Song, H-a, and Nam, I. (2013). Small-dollar accounts, children's college outcomes and wilt. Children andYouth Services Review, 35 (3), p. 535-547 and Friedline, T., Elliott, W., and Nam, I. (2012). Predicting savings and mentalaccounting among adolescents: The case of college. Children and Youth Services Review, 34, 1884-1895.11 Elliott, W., Song, H-a, and Nam, I. (2013). Small-dollar accounts, children's college outcomes and wilt. Children andYouth Services Review, 35 (3), p. 535-547.12 Mishel, L., Bivens, J., Gould, E., and Shierholz, H. (2013). The state of working America 12th Edition. Ithaca: NY:Economic Policy Institute Book, Cornell University Press; Oliver, M. L., and Shapiro, T. M. (1995). Black wealth, whitewealth: A new perspective on racial inequality. New York, NY: Routledge.2

Chapter 4 - Brief size—has important implications for the likelihood of graduating, 13 and there are significant inequalitiesin institutional selection, by student socioeconomic status. Two-year colleges have lower retention ratesthan four-year schools, even after accounting for differences in the types of students. 14 Because those whoattend two-year schools tend to come from families with fewer advantages, these retention differencesexacerbate inequality.• Beyond institution type, student pathways through college represent another way in which inequalitiesinteract with the education system to transmit advantage. Disadvantaged students are more likely: 1) totransfer from a four- to two-year school; 15 and 2) to transfer between postsecondary institutions with timegaps between leaving one school and entering another. 16 These differences have implications for thelikelihood of degree completion and returns. 17 Socioeconomic status may even affect student courseselection within institutions, in patterns that can close off career options and affect students’ academicexperience. 18• Importantly, assets make a difference for college completion, too, indicating that having school savingsmay help students to navigate the college environment more successfully than their relative disadvantagewould otherwise predict. Low-income students with school savings of $500 or more were five times aslikely to graduate from college as low-income students without a savings account and nearly three timesas likely as those with only basic savings, not designated for education. 19 Among children who expected tograduate from college while in high school, a low- or moderate-income child who has school savings of$1 to $499 prior to reaching college age is about four times more likely to graduate from college than achild with no savings account. 20 Black children who expected to graduate from college are four timesmore likely to do so if they have school savings of $1 to $499, compared to black children with nosavings account.How assets reduce wilt: CSAs align normative and role expectations• The institutional facilitation framework emphasizes three normative expectations—shared ideals abouthow institutions respond to individuals: (1) the American dream, (2) individualism, and (3) education as a13 Carnevale, A. P., and Strohl, J. (2010). How increasing college access is increasing inequality, and what to do about it. InR. Kahlenberg (Ed.), Rewarding strivers: Helping low-income students succeed in college (pp. 1-231). New York: NY:Century Foundation Books.14 Tinto, V. (1987). Leaving college: Rethinking the causes and cures for student attrition. Chicago: University of ChicagoPress.15 Goldrick-Rab, S. and, Fabian T. P. (2009). Beyond access: Explaining socioeconomic differences in college transfer.Sociology of Education, 82, 2, 101-125.16 Goldrick-Rab, S. (2006). Following their every move: An investigation of social-class differences in college pathways.Sociology of Education, 79, 1, 61-79.17 Cabrera, A. F., Burkum, K. R., & La Nasa, S. M. (2005). Pathways to a four-year degree: Determinants of transfer anddegree completion. In Seidman, A. (Ed.) College Student Retention: Formula for Student Success. Westport, CT: PraegerPublishers. Cabrera, A. F., and La Nasa, S. M. (2000). Understanding the college-choice process. New Directions forInstitutional Research, 107, 5-22.18 Ibid.19 Freidline, T., Elliott, W., and Nam, I. (2013). Small-dollar children’s savings accounts and children's college outcomes byrace. Children and Youth Services Review, 35 (3), p. 548-559; Elliott, W., Song, H-a, and Nam, I. (2013a). Small-dollarchildren’s saving accounts and children's college outcomes by income level. Children and Youth Services Review, 35 (3),p. 560-571.20 Elliott, W., Song, H-a, and Nam, I. (2013). Small-dollar accounts, children's college outcomes and wilt. Children andYouth Services Review, 35 (3), p. 535-547.3

Chapter 4 - Brief path to economic mobility. These normative expectations may provide a way to help understandeducational differences within the American educational context.o The American dream serves the functional purpose, at least in pretext, of providing everyone withequal opportunity.o Individualism is the belief that individuals, not institutions, are causes of things that matter.Evidence suggests that people believe opportunities generally exist for everyone and that it is upto the individual to take advantage of those opportunities. Because people maintain their belief inthe basic idea of the American Dream, they resist institutional explanations for explainingvariations in individual outcomes.o Americans also generally believe in the idea of education as a path to social and economicmobility. 21 Almost all students aspire to attend college and most parents want their child to attendcollege. 22• Unfortunately, once minority or low-income children arrive in school, they often find that their ownactions do not produce the kinds of institutional responses that normative expectations predict.• Regardless of the child’s cognitive expectations she is forced to perform school related activities in thecontext of socially shared role expectations for her. Role expectations that create advantage for somechildren unevenly increase the amount of return a child can expect to receive from investing effort andability into schooling. Role expectations that disadvantage some children reduce the amount of return achild can expect to receive from investing effort and ability into school. In the ideal scenario, institutionswould be held constant and variation in outcomes would be the result of personal capabilities—effort andability. In other words, if U.S. society worked the way that many Americans believe it does, normativeexpectations and role expectations would be in ideal harmony with one another.• Unsurprisingly, for minority and low-income children role expectations are often dissonant withnormative expectations. Role expectations are critical because they represent the ongoing struggle andinstitutionalization of rules that divert resources to be used to augment certain groups’ use of effort andability and not others, constraining the action of those groups who are not provided institutional benefits.o Large variability in school funding creates distinct advantages for some children, while inferioreducational opportunities limit the life chances of others. 23o At the individual level, advantaged parents leverage their homes for superior educationalopportunities for their children by moving to better neighborhoods where high-quality schoolsexist, using their individual power to exploit the disparities in resources. 24 Lack of wealth(primarily inherited wealth) prevents many poor and black families from moving into theseneighborhoods and, therefore, from accessing these schools and the opportunities they wouldafford.21 Ogbu, J. U. (1983). Minority status and schooling in plural societies. Comparative Education Review, 27(2), 168-190.22 Horn, L. J., Chen, X., and Chapman, C. (2003). Getting ready to pay for college: What students and their parents knowabout the cost of college tuition and what they are doing to find out. Washington, DC: National Center for EducationStatistics.23 See, for example, Kozol, J. (1991). Savage Inequalities. New York: Harper Collins.Kvarme, L. G., Helseth, S., Sorum, R.,Luth-Hansen, V., Haugland, S., and Natvig, G. K. (2010). The effect of a solution-focused approach to improve selfefficacyin socially withdrawn school children: A non-randomized controlled trial. International Journal of NursingStudies, 47(2010), 1389-1396.24 Shapiro, T. M. (2004). The hidden cost of being African American: How wealth perpetuates inequalities. New York, NY:Oxford University Press.4

Chapter 4 - Brief • However, the external context cannot fully explain children’s behavior because of the internal processthat occurs and the varied types of experiences that low-income children have with respect to school. So,while a high percentage of low-income children underachieve in grades K-12 and in college, we also seeothers who are high-achievers.Changing the External Context with CSAs• Changing the distributional consequences of role expectations and the bargaining power of minority andlow-income children can change role expectations that are in conflict with normative expectations. In thecurrent system either low-income parents—who are at a disadvantage for providing the institutionalcontext to counteract disadvantageous role expectations—or philanthropic organizations—whose effortsare not comprehensive or systematic enough to support all children—are expected to provide theresources for challenging these role expectations. Public institutions have largely retreated from thisresponsibility, with the rise in college costs, even at state schools, and the disinvestment from financialaid based on need.• Especially given evidence to suggest that asset effects on educational outcomes can be realized atrelatively low levels of investment, however, there is reason to suspect that public support for widespread,even universal, children’s savings may succeed where reliance on individual or sporadic efforts has not. Anational CSA program may provide children with the bargaining power they need to deemphasizedisadvantageous role expectations shared by most in the formation of their own identity.• CSA programs may align role expectations with normative expectations by ensuring that college appearsattainable to children. CSA programs may also enable communities to ensure every child has collegesavings and forms a college-bound identity.• CSAs may also provide a way for children to interpret and overcome difficulty. In order to sustain animage of a future self as being college-bound, the context must provide a way to address inevitableobstacles to the goal of completing college. Here, the role of school savings is clear. Children are morelikely to act on their college-bound identity when resources augment their use of effort and ability tomake the image a reality.CSAs Unlock Motivation and Empower Low-Income Students to Succeed• If a child’s experiences with schools teach that her investment of effort and ability is undervalued relativeto other children, the decision to invest in education becomes less likely. While the benefits of educationultimately outweigh the costs, minority and poor children often find themselves competing in an unfairgame. While research has shown, for example, that black children have equal or higher levels ofmotivation for performing academic work, 25 they must expend more effort to achieve the same results dueto differences in how institutions augment their effort.• When children have a CSA they may begin to act as though they have a right to attend, and expect tocomplete, college. With a financial stake in college comes a power that translates into differentinstitutional interactions. Children’s savings programs may empower children to participate in, negotiatewith, influence, control, and hold accountable the schools they attend.o Children who feel empowered are hypothesized to feel more comfortable about asking teachers,counselors, and school administrators for information about higher education or financial aid.25 Example, Graham, S. (1994). Motivation in African Americans. Review of Educational Research, 64(1), 55-117.5

Chapter 4 - Brief ooThey may also be more likely to take college-prep classes or entrance exams, or to apply to moreselective colleges.They may be quicker to seek out an adviser when encountering challenges academically and mayeventually become better financial aid consumers.6

Chapter 4 - Brief Recommended citation: Elliott, W. & Rauscher, E. (2013). From disadvantaged students to college graduates: The role of CSAs (Chapter 4 -­‐ Brief). In W. Elliott (Ed.), Giving children a financial stake in college: Are CSAs a way to help maximize financial aid dollars? (ong>Biannualong> ong>Reportong> of the Assets and Education Field). Lawrence, KS: Assets and Education Initiative. Acknowledgments AEDI is indebted to countless individuals for their invaluable guidance in pulling together this report on the assetsand education field. In particular, the following scholars either helped co-author specific chapters in the reportand/or provided detailed feedback on the overall report: Dr. Reid Cramer; Mrs. Rachel Black; Dr. Terri Friedline;President of the Hatcher Group, Ed Hatcher; Mr. Robert Johnston; Ms. Amy Saltzman; Mr. Robert Kelchen; Mrs.Sally Kakoti; Mrs. Melinda Lewis; Dr. Emily Rauscher; Dr. Trina Williams Shanks Dr. Margaret SherrardSherraden; and Mr. Thomas Showalter.We would also like to thank the Hatcher Group for editing (substantive as well as copy editing) and designing thisreport. They have been a valued partner in pulling together this report.Finally, this report could not have been done without the generous support of the Lumina Foundation, CitiFoundation, Ford Foundation, and the Charles Stewart Mott Foundation.These individuals and organizations are not responsible for the quality or accuracy of the report, which is the soleresponsibility of AEDI. Nor do they necessarily agree with any or all of the report’s findings andrecommendations.About Us The mission of the Assets and Education Initiative (AEDI) is to create and study innovations related to assetsand economic well-being. The specific focus is on the relationship between children’s savings and the educationaloutcomes of low-income and minority children as a way to achieve the American Dream. AEDI, a division of theKU School of Social Welfare, builds the field’s capacity to conduct rigorous research and advocates for theeconomic well-being of low-income and minority children. For more, visit InformationWilliam Elliott IIIAssistant Professor, University of KansasDirector, Assets and Education InitiativeTwente Hall1545 Lilac Lane, Rm 309Lawrence, KS 864-22837

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