The Role of Children’s Savings Accounts in Promoting Savings for College Among Welfare Recipients: The Case of Harold Alfond College Challenge (HACC)

Research indicates that welfare receipt is an important predictor of household savings towards offspring’s postsecondary education. Meanwhile, a growing body of literature suggests that Children’s Savings Accounts (CSAs) are effective in promoting the saving rate of American households. In this study, we first examine whether there is a negative association between welfare receipt and saving for college and then test if participation in the Harold Alfond College Challenge (HACC) mitigates the negative association. As hypothesized, the predicted conditional probability of saving for college among welfare beneficiaries is 0.02 lower than non-welfare beneficiaries, regardless of their HACC account ownership. Welfare recipients who enroll in the HACC program are about 27% more likely to save for college than those who are not enrolled in the program. Research and policy implications are discussed.