Publication Date



One policy rationale for promoting Child Development Accounts (CDAs) is that they may help reduce college debt, but no research provides evidence of this. Research does suggest that high-dollar student loans ($10,000 or more) can reduce the probability that lower income students in particular persist in and graduate from college. In this study, we find evidence to suggest that parents’ college savings may reduce the probability that students accrue high-dollar student loan debt across all income levels with the exception of high-income students. Based on this and evidence from separate research on small-dollar children’s savings accounts, we suggest that it is important for policies and programs to clearly state their goals. For example, if the goal is to improve expectations for attending and graduating from college or to increase educational attainment, small-dollar children’s savings accounts might make a difference. However, if the goal is to reduce college debt, programs must help children accumulate enough savings to reduce reliance on college loans.

Document Type

Working Paper


Financial Inclusion


Asset Building

Original Citation

Elliott, W., III, & Nam, I. (2013). Reducing student loan debt through parents’ college savings (CSD Working Paper No. 13-07). St. Louis, MO: Washington University, Center for Social Development.


529, asset accumulation, bank accounts, child development account, child savings, child savings account, college debt, college savings, college savings plan, debt, education, educational outcomes, educational expectations, parental involvement, savings, savings outcomes, saving, social responsibility, youth savings