College Savings Plans (529 plans) and Child Development Accounts (CDAs) are two policy tools designed to encourage families to save for college. In Maine, a statewide CDA program has been established using the state’s 529 plan platform and offering a $500 financial incentive for postsecondary education to every newborn. This program is designed to increase access to higher education by encouraging college savings at the beginning of a child’s life. Survey data from eligible parents (N = 437) suggest that the $500 incentive was attractive and financially sophisticated parents were more likely to enroll their child. We conclude that financial incentives can increase enrollment in asset-building programs but are not the ideal strategy to achieve universal enrollment.
Subsequent publication: Huang, J., Beverly, S. G., Clancy, M., Lassar, T., & Sherraden, M. (2013). Early program enrollment in a statewide Child Development Account Program. Journal of Policy Practice, 12(1), 62–81. doi:10.1080/15588742.2012.739124
Project: College Success