PULLMAN, Wash. – Under a new program that is the first of its kind in the nation, more than 400 Washington State University students will have a chance to open a savings account with an interest rate of up to 400 percent and apply funds from the account towards future educational expenses at the university.
The newly funded program, called Assets for Independence, will be administered by the WSU Office of the Provost. Matching funds for the student savings accounts will be provided by WSU Student Financial Services under a $1 million grant from the U.S. Department of Health and Human Services.
The program is designed to boost student retention by helping to meet unmet financial need and building financial literacy for low-income students. Statistics from WSU’s student population show strong correlations between unmet financial need and academic deficiency, persistence and graduation.
“This program will offer financial support and skill-based support in the area of financial literacy,” said Brian Dixon, WSU assistant vice president for financial services. “It’s a pretty sizable scholarship and money motivates behavior. Most students don’t get around to saving money, but this program will give them a chance to experience that delayed gratification, with a big carrot at the end.”
Under the program, students who save $1,000 throughout the year will receive $4,000 in matching funds, in addition to academic support, financial literacy education and additional support. All of the students’ savings and matching funds will go toward educational expenses at WSU (tuition and fees, books, supplies, and equipment required for courses).
“By saving $1,000 and getting $4,000, that really increases the students’ buying power,” Dixon says. “For financially challenged students, it’s really hard to dig out of those holes once you get into them. This program will help them in the short term and the long term.”
The program is open to 425 students over five years (85 students per year). Participants must complete the academic year in “good academic standing” according to WSU policy and they are required to complete financial aid and financial literacy requirements, including participation in the SALT program.
Washington Trust Bank will play an important role in the project, providing free accounts and services to participants.
“I think it was important for us to be competitive for this grant, to have a flexible, local community bank involved,” Dixon says. “It’s a key community connection and we’re starting to see those partnerships work together. These kinds of grants are recognition for the kinds of partnerships we make.”
WSU is the first institution in the country to develop this student retention model and leverage institutional and federal funds in this manner. A program coordinator will be hired in the coming months and the first cohort of students is expected to begin the program in early 2016.
The grant is the latest successful collaboration between the Office of the Provost and a University department or college to promote student success.
“This is a great example of how our new Student Success project initiative can foster new or scaled-up initiatives that facilitate access and successful progress toward graduation for our students,” said Erica Austin, interim co-provost. “The key to making this work is collaboration and creativity, combined with a strong evidence base to build external funders’ confidence in our proposals.”
Todd Mordhorst, Communications Coordinator, WSU Office of the Provost and Executive Vice President, 509-335-8047, firstname.lastname@example.org