Can a special program that adds $50 to a special bank account for every kindergartener really make a big difference?
A program called Kindergarten 2 College (K2C) in San Francisco started doing this in 2011. Since then, similar programs have spread to many places in the U.S. In fact, a report from Prosperity Now, a group that helps people with money matters, says that by the end of 2022, there were 128 of these programs in 38 states, helping 5 million kids.
In May of this year, the first group of kindergarteners who joined K2C graduated from high school. On average, they had saved $1,422 in their K2C accounts. This money came not only from their families but also from the program.
Topic | Key Points |
|---|---|
| Program Overview | The Kindergarten 2 College (K2C) program deposits $50 into a college savings account for each kindergarten student. The program was created by José Cisneros, San Francisco’s elected treasurer, along with then Mayor (now Governor) Gavin Newsom and Citibank. |
| Expansion and Impact | Since its start in 2011, K2C-inspired programs have spread across the U.S., with 128 active programs in 38 states, benefiting 5 million children. A 2009 study by researcher Elliott showed that children with college savings accounts were twice as likely to expect to attend college and performed better academically. |
| Success Stories | Thailyah Miller, an 18-year-old K2C beneficiary, plans to attend San Jose State University with funds from her account. She’s a great example of how the program helps students from families with limited college experience or financial resources. Miller’s involvement as a student ambassador also earned her rewards, highlighting the program’s flexibility and community involvement. |
| Account Contributions | K2C accounts receive contributions from parents, private donors, and community/scholarship groups. Parents can set up automatic deposits from paychecks, earning extra incentives. Funds can also be transferred to California’s state-run 529 college savings program. |
| Inclusion and Access | An important feature of K2C is providing college savings accounts to children even if their parents don’t have traditional bank accounts. Citibank’s technology plays a vital role in this inclusion, making the program accessible to a wider range of families. |
| Broader Impact | The success of the K2C program and a similar statewide initiative in California led to increased interest in children’s college savings accounts. These initiatives aim to bridge the gap between rich and poor students’ college attendance rates. The growing number of participants in college accounts shows the potential for these programs to have a meaningful impact on educational opportunities. |
The program gave them extra money for saving and for setting up their accounts. $1,422 might not sound like a lot when college can cost almost $40,000 each year, but it’s enough to pay for one year at a community college in California, which is one of the cheapest options.
What’s even more important is that researchers and people who support this program say that just having a college savings account, even if there isn’t much money in it, makes kids from families with less money start thinking about going to college.
And not only that, it makes it more likely that they will actually go to college. William Elliott III, a professor at the University of Michigan who knows a lot about these accounts, says that having a special account for college makes kids think about college in a new way. His work inspired the K2C program.
⬇️ More career articles ⬇️
Elliott started looking into how having savings accounts relates to going to college when he was studying for his master’s degree in the early 2000s. He wanted to understand his own experience as a child growing up in a really poor neighborhood. He remembered a kid whose dad had saved money for him to go to college. This made the kid stand out because he had a plan for college.
In 2009, Elliott and another researcher did a study. They found that kids with savings accounts for college were almost twice as likely to think they would go to college compared to kids without such accounts. The kids who expected to go to college also did better in school. Elliott says that having money saved for college helps you think more clearly about your future. It’s like a cycle: when you’re young, college seems far away, but having a savings account makes it feel closer, so you’re more likely to prepare for it now. When schools help with these accounts, teachers might also start teaching about money, which encourages saving and planning for the future.
The money that San Francisco adds to K2C accounts is small when compared to big plans like “baby bonds” that aim to reduce the wealth gap between different races. A plan from the last Congress suggested giving $1,000 to every child born in the U.S. The government would also add more money every year for families with lower and middle incomes. By the time a low-income kid turns 18, they could have $50,000 in the account. But these big plans are unlikely to happen now. Instead, smaller savings accounts for college are becoming more common at local and state levels.
Elliott’s original study from 2009 caught the attention of José Cisneros, who was San Francisco’s treasurer at the time and still holds the position now. Together with Gavin Newsom, who was the Mayor of San Francisco back then (and is now the Governor of California), and Citibank, they created the K2C program. This program puts $50 into a special bank account for each kindergartener. This idea came about because they wanted to address the big difference in the number of rich and poor kids who go to college.
A recent study from the Brookings Institution looked at students who started ninth grade in 2009. They found that only 51% of students from families with the least money had started college within a year and a half of graduating high school. In contrast, 89% of students from wealthier families had started college.
Cisneros was troubled by this big difference based on family wealth. Elliott’s research suggested that city-funded accounts could help make this gap smaller.
One success story from the K2C program is Thailyah Miller. She’s 18 and will be going to San Jose State University soon. She plans to study public health and Black women’s studies. Miller’s family didn’t know how to pay for college since no one in her family had gone before. But the K2C program helped her a lot. Just knowing that there was an organization in her city to help her afford college made a big difference. This led to many opportunities coming her way.
It’s important to note that Miller became a student ambassador for the program, which earned her a $500 scholarship and other rewards added to her account. This is a good example of how the K2C program works. It offers a simple account where parents, private donors, and community groups can contribute. Parents can set up automatic deposits from their paychecks, and this can earn them extra money. They can also move funds to California’s state-run college savings program.
One key aspect of K2C is that children get a college savings account even if their parents don’t have a regular bank account. Citibank’s technology helps make this possible and efficient.
Traditionally, more well-off families used 529 college savings accounts, which are special accounts created by Congress in 1996. These accounts give tax advantages and are mainly used by middle- and upper-income parents and grandparents. But now, California has started a new program for children. All newborns, no matter their family income, get money deposited into an account. And if their parents also open a special college savings account, they can get even more money. This new program in California has helped increase the number of college savings accounts a lot.
The success of the K2C program’s graduating class shows that new programs like this can really make a difference. Graduating seniors have said that nobody was talking about college until they learned about the K2C program. This made them excited about their future.
