Asset Building Financial Inclusion Working Paper

When Effort and Ability Are Not Enough to Reduce the College Enrollment Gap, Does College Savings Help?

Low-income Americans continue to believe in the idea of education as a means to economic mobility. With limited opportunities for accumulating savings for college, however, many high-achieving low-income students do not believe that a four-year college is within reach. They learn from a very young age that while college may be desired, it is not affordable; 43% of 10th grade students report that college costs are very important for the type of school they will choose. This study examines whether college-bound (i.e., students who expect to graduate from a four-year college and who are high achieving) low-income 10th graders enroll in a four-year college shortly after graduating from high school. In this study, 46% of college-bound low-income student experience “wilt”; that is, they do not attend college after graduating from high school even though they had expected to do so. Asset accumulation, especially in the form of college savings, may help reduce wilt. That is, low-income students may be more likely to actually enroll in a four-year college if they have a way to pay for it. Analyses reveal that college investment funds (such as a mutual fund) help reduce wilt.

Subsequent publication: Elliott, W., III, Song, H-a, and Nam, I. (2013). Small-dollar accounts, children’s college outcomes, and wilt. Children & Youth Services Review, 35(3), 535–547. doi:10.1016/j.childyouth.2012.12.001

Project: Inclusion in Asset Building: Research and Policy Symposium


Elliott, W., III. (2011). When effort and ability are not enough to reduce the college enrollment gap, does college savings help? (CSD Working Paper No. 11-31). St. Louis, MO: Washington University, Center for Social Development.