Can $ 50 change a child’s life? Los Angeles Public College examines savings

CA $ 50 change in a child’s life? Los Angeles has invested millions of dollars in launching the largest universal child savings program in California in the hope that it is possible, experts say, supported by a feasibility study.

The city opened more than 40,000 college savings accounts last week, with a balance of $ 50, as part of a plan to help every first-grader in America’s second-largest school district.

Officials have announced the program, which follows a similar test in San Francisco, as an important step for students to “even support the playground” and encourage families to pursue higher education. Experts say research has shown that these programs, even with a small amount of cash, can have a profound effect.

College costs have risen dramatically in recent decades – jumping 169% since 1980 – surpassing families’ ability to pay, and some have stopped going to university altogether. In California, thousands of people seeking post-secondary degrees face homelessness and food insecurity amid the dual burden of high tuition fees and a devastating statewide housing shortage.

Los Angeles says its program will help ensure more students attend college, citing data that students with কলেজ 1- 99 499 in college savings accounts are three times more likely to go to university and four times more likely to graduate. Similar programs have yielded promising results, research shows.

CSA (Children’s Savings Account) programs have been discontinued across the United States in the last 15 years, says William Elliott, a professor and expert in college savings accounts, college debt and resource inequality with the University of Michigan. According to a 2020 report, there are more than 100 child savings account programs in 36 states and Washington DC, serving about 1 million children.

“Theoretically part of the way it’s supposed to work is that it creates thinking about this future adaptation and college and it could be a potential future for themselves,” says Terry Friedline. A professor of social work at the University of Michigan, Dr. Researched to improve the health of low-income families through savings.

Specifications of programs vary, but typically include states and cities that provide child savings accounts for children in birth and kindergarten or first grade, so they can add savings and eventually enter college. Nevada has launched the first statewide program in the United States, which sets up a college savings account with $ 50 for each kindergartener attending a public school. In Maine, every child born after 2013 will automatically receive a 500 grant for future education expenses while every child born in Pennsylvania from 2019 is eligible to receive an account with $ 100.

In Los Angeles, accounts are available for all first-graders, regardless of income or immigration status. The decision by officials to use the City account allows for the inclusion of unregistered families and others, Elliott said. These programs also create systems that allow third-party donors to contribute more easily, he added.

This fund is intended for post-high school education expenses only, including two-year or four-year colleges, vocational schools and some trade schools. Each account is funded by 50 and families are encouraged to set up regular contributions, which collect interest over time. Students or parents may request a speedy withdrawal in case of a family emergency.

Officials behind the program looked to a similar effort in San Francisco, which launched the first publicly funded universal children’s savings account program in the United States. Since 2011, San Francisco City Public Schools has opened a College Savings Account with $ 50 for each kindergartener, bringing the total to about 50,000 accounts. At the time, 23% of students had put $ 6.8 million away, according to city data.

Research on similar programs has shown a correlation between CSA and increased enrollment for colleges, as well as further enrollment in four-year colleges.

A survey conducted on a Boston program targeting seventh- to tenth-graders found that families with accounts saved about $ 2,000 more than those without accounts and were more likely to make monthly contributions. These results are impressive for a program that is not very intensive – starting with just 50 50 per student account – says Paco Martorell, an associate professor at UC Davis School of Education.

And the benefits of the CSA program extend beyond their cash value, Elliott said. She points to research that shows a positive effect on children’s social and emotional development, the effect on parenting practice – parents are less likely to use spanking – and even reduce maternal depression.

“It’s not that they’re getting the money in their hands, it’s that their children have a better understanding of the future,” Elliott said. .

Some critics of such programs argue that the immediate needs of low-income people should be addressed before creating future resources for children, a critique Elliott says is misleading.

“The wealth that gives you hope is real hope. It says you have money stuck that you will be able to use to go to college one day. It’s a different kind of hope,” he said. For, they want to get their future partnership – this LA program … to give kids a real hope. “

Such a program could eventually roll out statewide. California Governor Gavin News has unveiled a plan to create a college savings account for 3.7 million low-income children. This comes as the cost of attending a school within the University of California system continues to rise. Students now pay $ 35,000 to $ 38,000 a year to attend a UC between tuition, transportation and accommodation.

Amanda Can Fried, San Francisco treasurer and head of policy and communications at the tax collector’s office, also said such programs are ambitious, not about resolving the college’s capacity crisis.

“It’s very clear to the family that the amount you’re saving doesn’t matter,” he told the LA Times. “It simply came to our notice then. You’re talking college with your kids. You show them that you trust them and that the city trusts them. “

Outside of the CSA program, there must be an effort to create systemic change, Friedline said.

“We need to take steps to break down the systems that exclude and marginalize poor and black and brown families,” he said.