A new College Savings Account Research Demonstration Project was unveiled by the U.S. Department of Education last week that is designed to help disadvantaged students pay for higher education.
The $8.7 million needed for the initiative will come from federal funds in Gaining Early Awareness and Readiness for Undergraduate Programs, or GEAR UP, a program that aims to improve college readiness among low-income middle school and high school students.
About 10,000 GEAR UP students will receive $200 in seed money to start accounts as freshmen in high school. Students then will have the opportunity to earn $10 a month, which would be matched by the government over the next four years, with the chance to save more than $1,000 by the end of high school. GEAR UP will follow the outcomes of students receiving savings accounts with a control group of peers who did not. Research suggests that savings accounts can be a factor in students enrolling in college.
