The mayor of San Francisco, Gavin Newsom, believes that it’s a great idea to start college savings accounts for kindergarteners. According to an article by John Cote in the San Francisco Chronicle:
Every child who enters kindergarten at one of San Francisco’s public schools will get his or her own city-funded college savings account under a groundbreaking program officials plan to begin rolling out this fall, despite the current budget woes that will force layoffs and service cuts in other areas.
The deposits would be small – $50 to start, $100 for lower-income children – but the hope is that they will pay huge dividends, teaching students about saving and budgeting while forging the conviction that a college education is within reach.
Apparently a study by researchers at the Center for Social Development at Washington University in St. Louis discovered that children who had any money at all set aside for college were about seven times more likely to eventually attend college.
The college savings plan will include about 25 percent of the city’s incoming kindergartners. According to the article, students will get a trust account in their name with $50 from San Francisco. The Earned Assets Resource Network (EARN), a San Francisco non-profit, promises to contribute $100 for every student whose family also saves $100. Newsom said that he would “fight to the end to get it in the budget. I believe in it that much. … I want to be there when they graduate and see the faces of these kids.”
That sentiment is refreshing but it seems like the Kindergarten College Accounts would result in total savings of $250 a year per child; that’s a whopping $3000 over the time it takes a student to get from kindergarten to high school graduation. The in-state fee to attend the University of California is now $9,285 a year.
Publicly funded college savings plans are an interesting idea; parents and children are much more likely to go to college when the begin making financial plans to do so early on. But while we’re on that whole “saving for the future” thing maybe it’s the state of California that should be working on setting aside money so that kids who start kindergarten next fall can actually afford to attend college in 2023. At the rate tuition has been growing at California public colleges in the last 30 years, higher education is going to be prohibitively expensive pretty soon. That $3,000 isn’t going to take kids very far.
This is precisely the sort of thing it might well behoove Newsom to consider. He’s been running for lieutenant governor of California since March. [Image via]
