SAN FRANCISCO, CA - Mayor Gavin Newsom and Treasurer José Cisneros today announced the launch of Kindergarten to College (K2C), the nation's first universal children's savings account program. K2C will open and seed college savings accounts for every kindergartner entering public school in San Francisco. The goal is to put all school children on the path to college.
"We hope these accounts will change the odds for kids," said Anne Stuhldreher, Senior Research Fellow at the New America Foundation. "Research shows that small amounts of savings can have big effects." A recent study found that students with savings accounts are many times more likely to graduate high school and attend college. All parents surveyed in San Francisco by the City said they plan to save for college, but only 50 percent are currently doing so. Through K2C, families will have an easy and automatic way to save for their child's college expenses.
Starting in December, the K2C program will automatically open a savings account for kindergartners. The City of San Francisco will seed the accounts with an initial deposit of $50, while lower income children will be eligible for an additional $50. Families will be encouraged to use the accounts to save for their child's college education, while teachers will incorporate the accounts into their curriculum to teach financial literacy. Through organizations including the San Francisco Foundation and EARN, families will receive matching funds and incentives to contribute to their child's account.
"Tough budget times ask us to do more with less," said Stuhldreher. "And K2C does just that. It's a forward thinking approach to a daunting problem. It's the kind of approach California and our nation needs more of right now. We hope these accounts will be magnets that will draw deposits from local businesses and rotary clubs, not to mention families and grandparents."
In addition to promoting inclusive college savings policies through the College Savings Initiative, the New America Foundation has long called for the creation of universal child savings accounts. New America is working to advance support for the bipartisan "ASPIRE Act," a proposal that would create a savings account at birth for every child in the United States. The ASPIRE Act has been introduced in both the House and Senate in four consecutive Congresses.
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