Early and Often: A Counterfactual Model of College Savings Accounts and Math Attainment in High School

Background: In recent years, there has been an influx of studies that have explored the various impacts of college savings accounts (CSAs). However, non-experimental studies have been unable to disentangle the impacts of CSAs from the factors that predict selection into CSAs. Studies have not looked at the impacts of CSAs on academic factors related to high status occupations, such as those related to STEM. As a result, this paper uses counterfactual modeling to measure the relationships between CSAs and advanced math course-taking in high school.

Methods: This paper utilized restricted-use data from High School Longitudinal Study of 2009 (HSLS). The HSLS employed a stratified, two-stage random sampling design with schools randomly selected at the first stage, followed by students randomly selected from these schools at the second stage.

Treatment: Having a college savings account; Covariates - gender, race/ethnicity, first language, social class (SES), family structure, home ownership, urban school location, behavior (suspended or dropped out), repeated a grade, disability status, academic performance, behavior, and attendance indicators from 8th grade, and student and parent expectations that they will graduate college. Outcomes and Covariates - the outcome is taking an advanced math course in high school, which is defined as trigonometry or higher. Covariates - freshman year math course level, when families started saving for college and how much money families currently had saved for college.

Results: We ran three models; the first model assessed the impact of having a college savings account on advanced math course-taking controlling for prior math course-taking. Students who had a college savings account were more likely to take an advanced math course (OR = 1.19; SE = 0.11). After controlling for when families started saving for college, saving money early increased the odds of advanced math course-taking. However, the impact of having a college savings account became non-significant. Third model controlled for the amount of money currently saved for college. This increased the odds of advanced math course-taking, but the impact of a college savings account became non-significant. The full model added both when families started saving for college and how much money families currently had saved for college. The amount of money currently saved increased the odds of advanced math course-taking (OR = 1.12; SE = 0.03).

Conclusions: Key finding demonstrates that having a college savings account (CSA) increases advanced math course-taking when we account for prior math course-taking, and a robust array of demographic, academic, behavioral, social, and emotional factors that impact selection into CSAs. However, part of the impact of CSAs may be due to when the account was opened and how much money has been accumulated in the account. While CSAs may represent a broad way to invest in STEM education that have impacts above and beyond selection effects, early planning and larger investments, may be driving these impacts. Therefore, efforts to universalize CSAs should be accompanied by efforts to fund them both early and often. Otherwise, the wealth gap may continue to stratify academic outcome both before and during college.