College Savings and Parent Engagement: Lessons from Research and the Field

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1 College Savings and Parent Engagement: Lessons from Research and the Field Lena Eisen, ECPI Project Manager Dr. Melissa Bert, ECPI Data Quality Manager Alexandra Chewning, VP of Research & Evaluation, uaspire Overview Introductions College Affordability and Savings Early College Planning Initiative Research Design, Summary Statistics and Early Results Lessons Learned Strategies for Better Parent Engagement Discussion and Q & A with Dr. Bridget Terry Long, Harvard Graduate School of Education National College Access Network September 16, 2014 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 College Costs Continue to Rise Average undergraduate tuition and fees Full-time students at Public Institutions: 1969 to 2011 Tuition & Fees (Constant 11 $) 4-Years 2-Years $ Source: Digest of Education Statistics, Table 349 Academic Year Widening Gap: Financial Aid & Out of Pocket Costs Average out-of-pocket net price at Public Four-year Colleges (constant dollars) Income Level Highest Upper middle Lower middle Lowest $600 $1, $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 Source: NPSAS: Price Estimates for Attending Postsecondary Education Institutions (NCES ). Price of attendance minus total aid.

2 College Affordability and Savings Financial aid and savings are more important than ever, yet both are underutilized. Are people submitting the FAFSA? Are people saving for college? Of parents with children < 18 years of age, Only 73% of high-income families have started saving Only 34% of low-income families have started saving 1 How can we engage parents to address these issues? Lessons from another financial aid intervention The FAFSA Experiment (Bettinger, Long, Oreopoulos, & Sanbonmatsu, 2012) Goal: Test effects of helping parents complete the FAFSA and give personalized financial aid information. Families complete their tax returns as usual For families in the FAFSA treatment group: Transfer relevant tax info into FAFSA Provide estimate of federal and state aid eligibility Submit FAFSA 1 America Pays for College 2014: Sallie Mae s National Study of College Students and Parents conducted by Ipsos Public Affairs (Report). Did something so small impact aid receipt and enrollment? Information alone did not affect FAFSA completion and eventual college enrollment Information with personal assistance led to improved college enrollment and persistence The FAFSA Treatment significantly increased enrollment among graduating HS seniors Increase of 7 percentage points in college going (34% compared to 27% for control group) Could information + assistance help families SAVE? What about savings incentives? Why Don t More Families Save? Families may have little disposable income Families may delay setting up a savings plan College savings options may be too complex Common misperceptions Costs of higher education What financial aid will cover How savings affect financial aid $ Are families not able to save or is complexity and lack of information preventing them from doing so?

3 Why Don t More Families Save? Like FAFSA, savings options may be hard to navigate 529 Plans: 45% of high income families use a 529 Plan, while only 12% of low income families do. 1 Do families lack information about savings options and benefits? Is the complexity of the application prevent families from saving? How can we create better programming to help families save? Can we help shape better policy? (Long and Bettinger ongoing work) Free college affordability workshops for Boston area parents of 7 th -10 th grade students from Partnership with Boston Public Schools, uaspire and MEFA Workshops presented by professional advisors uaspire s advisors serve in many Boston area HSs Massachusetts Educational Financing Authority (MEFA) offers the U.Fund, MA s 529 plan. Programs held in both school and community settings 1 America Pays for College 2014: Sallie Mae s National Study of College Students and Parents conducted by Ipsos Public Affairs (Report). Each family completed a survey about financial awareness and family demographics Each family randomly assigned to 1 of 3 groups Control Group: Informational workshop Is information alone enough to help families? Treatment Group #1: Same as above AND offered a simplified way to open a 529 plan (MA U.Fund) Would simplifying the process help families? Treatment Group #2: Same as #1 AND offered the initial minimum balance to open an account ($50) Would a small incentive encourage savings? Summary Statistics (828 families) Parent Racial Background 17% White; 12% Hispanic; 14% Asian; 45% Black Parent Maximum Education 16% HS graduates/less than HS 27% Some college/associate s Degree 41% Bachelor s degree/higher Family Income 37% under $4ok 18% $40-60k 29% $60k+ Fin Aid Awareness 49% Know about FAFSA 49% Know about Pell Grant 35% Know about 529 Plans

4 Are you saving for college? 30% Method (of those who said "yes") 14% Savings account 13% 529 Plan 6% Stock market 3% Checking 9% Other When did you start saving? 10% Last 2 years 6% Last 3-5 years 17% More than 5 years 64% No answer Why are you not saving/ not saving more? 64% No $ 33% Unsure of options 26% Can't save enough 22% Too complicated 15% Fear loss of aid 10% No college 4% Too early to save Total Preliminary Results # of Accts Opened Takeup Parents in Treatment Group 2 received the opening $50 deposit from ECPI # with Monthly Contribution Ctrl % 0 TG % 3 TG % 41 Over 1/3 of parents who opened accounts also set up automatic monthly contributions by themselves What We Also Learned: Parent Engagement Lessons 1. Planning: Make it easy to attend Location/Site Choose a familiar/trusted host site Easy to park? Nearby public transportation? Program Length Provide Choices of Day and Time School Year vs Summer Break Make life easier with incentives you can offer Offering multiple options improved attendance Partner to take advantage of school breaks Parent Engagement Lessons 2. Partnering! Schools and Community Organizations Take advantage of complementary schedules School staff capacity and competing demands Supporting outreach efforts 3. Program Content: Messaging Matters Personalizing the speakers: why should I listen to you? Using examples that matter for the audience Listen to feedback and revise for what works

5 Parent Engagement Lessons 4. Parent Outreach: How & When matters From? Invite from a trusted source/organization Timing Too early v. too late Outreach Method? Flyers sent home w/ students Mailed letters and postcards Phone calls and Listservs Facebook and social media Text messaging Framing: How outreach messages are framed matters What gets parents in the door? An opportunity to test different approaches Encouraging Parental Involvement The Importance of Framing Positive: With the help of financial aid, the average annual four-year college tuition is only $2,910. You and your student can start saving today. We can help! Neutral: Are you and your child thinking about saving for college? We can help! Negative: In , the average cost of a public fouryear college was $17,860. Are you prepared to save for your child s future? We can help! Encouraging Parental Involvement Positive Neutral Negative Total No Response 3,706 3,722 3,675 11,103 RSVPd OR Attended Workshop % Responded 2.91% 2.69% 3.52% 3.04% Positive Neutral Negative Total No Response 3,817 3,825 3,809 11,210 Attended Workshop % Attended 1.91% 1.53% 2.23% 2.30% Encouraging Parental Involvement Positive Negative RSVPd/ Attended Odds Ratio 1.08 (0.569) 1.32** (0.038) Attended Workshop Odds Ratio 1.06 (0.731) 1.35* (0.057) Positive: With the help of financial aid, the average annual four-year college tuition is only $2,910. You and your student can start saving today. We can help! Negative: In , the average cost of a public four-year college was $17,860. Are you prepared to save for your child s future? We can help!

6 1. This is no small task. Final thoughts 2. It s not enough to say there s no money to save and stop there. 3. We can help parents be prepared. Offer information & assistance with complex processes. 4. Messaging Matters in how you frame your outreach as well as program content. Discussion / Sharing Are you engaging your parents on college affordability topics? What is working for you? Do the lessons here ring true for your community? What else have you learned? Additional Questions uaspire (formerly ACCESS) now offers Training & Technical Assistance on Key College Affordability Topics for Organizations and Practitioners Customizable training focused on the needs of your frontline staff Topics include: family engagement, addressing a financial gap, loan counseling, preparing to pay a bill, FAFSA completion & verification, reviewing award letters Contact uaspire s President, Erin Cox, at Erin@uaspire.org Sign up for updates at uaspire.org/signup For more Information Prof. Bridget Terry Long Harvard Graduate School of Education Bridget_Long@gse.harvard.edu Lena Eisen, ECPI Project Manager Lena.Eisen@post.harvard.edu Dr. Melissa Bert, ECPI Data Quality Manager Melissa_Bert@mail.harvard.edu Alexandra Chewning, VP of Research and Evaluation, uaspire Alexandrac@uaspire.org