Los Angeles pays all first graders for college

A Giant exercise Steps to pay the children are in progress. On March 21, Los Angeles Unified, the second largest school district in the United States, enrolled every first-grader in a $ 50 free college-savings-account program. With 44,000 children, opportunity The It is the largest college-savings scheme for children in the country.

Children’s Savings Accounts (CSAs) usually helps for a specific purpose, usually college or buying a house. There are many barriers to accumulating wealth, especially for the poor. Most importantly, the lack of funds to set aside later, but bad experiences with banks — worries about credit scores, for example, or fears of overdraft fees — also deter people. An automated program can encourage families to invest.

Opportunity The Families will be able to use the savings account for college fees and related expenses such as tests and supplies. Funds can be used for any program of two or four years in an accredited institution. If families pay extra and pay taxes in the county, they will receive an appropriate contribution (up to $ 25 per year). If a student leaves the district, the fund will be confiscated and any family donations will be refunded. Families can opt out of the plan, but only a few can do so.

Elsewhere, similar efforts have been successful. Seed To Oklahoma (The seed is OKStarted 15 years ago. Newborns were randomly selected to receive $ 1,000 for the state’s college-savings plan, compared to those who did not. Families who received the money enjoyed long-term benefits. They were more likely to open an additional college-savings account for their children, and they had higher expectations for their child to complete graduation.

The seed is OK‘S beneficiaries have not yet graduated from high school, but other studies have found positive results from college savings, automatic or otherwise. One study found that poor children who graduate from college and have up to $ 499 in their account are three times more likely to graduate.

Since The seed is OK, Other automatic programs started. In 2011, San Francisco became the first publicly funded universal CSA Project in the United States. Two years later, Maine is the first state to ask parents to opt out of automatic enrollment; The participation increased from 40% to 100%. Other states followed. A universal program is expected to begin this spring in New York City, the largest school district, and the Governor of California plans to launch a statewide program soon. The seeds are scattered throughout the United States.

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This article appeared in the United States section of the print edition entitled “Seeds of Study”.

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