Savings study will contribute to knowledge
State savings study will contribute to knowledge

By Michael McNutt

Published: June 4, 2008

Teachers Jody and Ryan Webber fretted how they would start a college savings plan for their newborn son.

Then a month after their son Cale was born 13 months ago, the Stillwater couple received word their son would be among about 1,360 Oklahoma babies chosen as part of a study to receive $1,000 to be placed in the Oklahoma College Savings Plan.

"We're very grateful,” said Jody Webber, a teacher at Ripley High School. "We were going to do it anyway, but it's just an encouragement for us to continue to save for college.”

No state money is being for the study, state Treasurer Scott Meacham said during a state Capitol news conference Tuesday to announce the study. Meacham also serves as chairman of the savings plan.

Foundations are paying for the costs of the study and for the savings plans, which could amount to as much as $2.5 million, Meacham said.

The Webbers are part of a seven-year study to look at the economic and education effects a college savings plan has on the child and the family when an account is set up for babies.

It will try to assess whether families that received the college savings money did better in the long run in saving money for college and whether they became more involved in the child's education, said Michael Sherraden, founder and director of the Center for Social Development at the George Warren Brown School of Social Work at Washington University in St. Louis.

The center selected Oklahoma in late 2005 through a bidding process for the study.

"This particular study has exciting potential to create important national policy in terms of incentivizing savings for those who otherwise may not go to college,” Gov. Brad Henry said.

Beginning last year, about 2,700 randomly selected Oklahoma families agreed to participate: Half the newborns in those families got $1,000 in a special college savings plan; the other half did not receive any money, but their parents, like those of the children who received money, will participate in the study by completing periodic interviews about their saving behaviors.

All babies were born in 2007.

Families who received the $1,000 savings plan money may make additional deposits. Lower-income families will be eligible to have their contributions matched by the center's study funds with up to $250 per year for four years.

Sherraden said the study's results could influence national policy.

The United Kingdom gives each child born in that country about 250 pounds, or about $500, for college, while South Korea provides college money to about half of its lower-income babies.

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