Facebook App Encourages College Savings

Juma Ventures, a nonprofit that encourages young people from needy families to go to college, is offering cash incentives and other prizes through a new app that helps make saving for college more like a game. It’s also borrowing ideas that have proved successful in getting people to stay healthy, such as sending text alerts to show how their actions compare with those of their peers.

The group just unveiled a new Facebook application as part of its CollegeSet program, designed to prod youngsters to put money aside and fill out critical financial-aid paperwork.

The Facebook app, as well as a text-messaging service, are available to young people working with education nonprofits in five cities to set up college savings accounts. When they do, Juma matches their personal contributions up to $500; another $1,000 is contributed after the students complete other milestones.

The new app will award students 30 badges for activities that include completing their junior year of high school, committing to a savings goal, completing financial-training courses, and submitting a college application.

Juma also sends the teenagers financial tips directly to their mobile phones and tablets, as well as reminders and updates. And to get their competitive juices flowing, the text messages tell students when the contributions they make to their savings plans are above or below average compared with the savings of other people in Juma’s program.

“Similar tools have been used to help people exercise more or quit smoking,” said Nick Hutchinson, chief operating officer at Juma Ventures. “We’re applying the same principles of behavioral finance to encourage college savings.”

For more information: Go to collegeset.org.