College Savings - For Everyone
With tuition costs rising, college savings plans are becoming more and more popular. According to a recent study by Sallie Mae, 15% of families used them during the 2009-2010 fiscal year, up from 11% the year before and 9% two years ago.
But those plans are all started by private citizens, typically either parents or grandparents. And families with more money, whose children are already more likely to go to college, are also more likely to start a college savings account.
San Francisco has set out to fix that imbalance. The city just announced that it will become the first to launch a universal college savings account program. By 2012, every kindergartner entering public school in San Francisco will have their own college savings account, with the city providing an initial seed deposit of $50. Low-income families can qualify for an additional $50.
Although the initial amount isn't large, the program is designed to make it easy - and appealing - for families to continue to contribute. The San Francisco Foundation and local non-profit EARN have committed to providing limited matching funds and other incentives for parents who continue to add to the accounts.
Investing in the City's Future
The goal of the Kindergarten to College program (K2C) is to put every child on the path to college. City officials point to a study by the Center for Social Development at Washington University in St. Louis indicating that, among youth who expect to attend college, those who have a college savings account are seven times more likely to attend.
That, the city asserts, is a good investment. 'There's no better long-term investment we can make as a City than helping our kids go to college,' said San Francisco Mayor Gavin Newsom. 'Kindergarten to College will provide working families with the financial tools to turn a college education for their child from a distant dream to a practical reality.'
The program will also integrate financial education into the classroom. Schools will use the accounts as a tool to teach financial management. This also makes San Francisco the first city to integrate financial management into the official K-12 curriculum.
Kindergarten to College will roll out in 18 schools this year, covering about 25% of the incoming kindergarten class. City officials expect to double enrollment next year, and have full participation by 2012.