Despite a $483 million budget deficit, San Francisco Mayor Gavin Newsom wants to start a city-funded college savings account for kindergarteners in public school. From the Chronicle:
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.
The plan is to include all public-school kindergarteners by the third year, with funding help from corporations and nonprofits. Parents will be offered matching funds to encourage them to save their own money.
A study by the Center for Social Development at Washington University in St. Louis found children with modest college savings are seven times more likely to go to college. Of course, parents who set aside money for college are likely to be different from parents who don’t. It’s not clear that unearned savings will produce the same result.