Despite a pandemic and global economic downturn, children’s savings accounts (CSAs) saw commendable growth in 2020. CSAs across the country saw a 30% increase in participants from 2019, according to Prosperity
Now’s annual “State of the Children’s Savings Field” report. The number grew from 707,000 to now more than 922,000 children with CSAs.
Additionally, six new programs were launched in 2020, which added nearly 9,000 students to the new total.
CSAs programs provide long-term savings or investment accounts to help children and their families save for the future, specifically for a postsecondary education.
As of 2020, there are 109 active programs across 36 states and Washington, D.C. Most CSA programs are administered by nonprofit or community-based organizations (62%), followed by government agencies (32%), educational institutions (4%), and credit unions
(2%).
While CSA programs saw solid growth in 2020, the field still experienced disruption due to COVID-19. Several programs delayed planned launches or expansions due to the pandemic. Fewer programs launched in 2020 compared to 2019.
While foundations remain the top funding source for more than one-third of CSA programs, the CSA field will need to examine other sources of funding in the coming years. A need to diversify funding sources will be critical, especially as the pandemic
squeezes city and state budgets.
Similarly to the college access and success field, 83% of CSA programs encountered difficulties engaging virtually with current and prospective participants. Challenges aside, 82% of programs were able to adjust quickly in moving certain activities to
virtual platforms and increasing electronic communications to participants.
The report also touched on the conversation around equity in educational attainment and program goals. Programs were asked to rank their top three long-term goals. Of the 62 programs surveyed, nearly 40% are focused on reducing racial inequities in educational
attainment. (Note: Last year’s survey was the first time response options included program goals related to addressing racial inequities.)
Also included for the first time in this report was a measure of how many programs provide targeted contributions to CSA participants from low-income families. (You can read more about the 10 policy design elements necessary to deliver CSAs at scale here.)
Some 39% of CSA programs surveyed offer targeted benefits to participants from low-income households, which includes programs that:
Only serve participants from low-income households.
Offer a savings match restricted to participants from low-income households.
Provide additional deposit(s) for participants from low-income households or who attend a school with predominately students from low-income households.
The findings of the 2020 “State of the Children’s Savings Field” report provide hope that CSAs will continue to be a useful tool for students and families to think differently about the possibilities of postsecondary attainment.
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