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Financial Planning > College Planning > Saving for College

San Francisco Mayor Wants College Accounts for Kindergarteners

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Some say everyone should go to college. Mayor Gavin Newsom is trying to ensure that's the case in San Francisco.

The San Francisco Chroniclereports the proposal calls for every child who enters kindergarten at one of San Francisco's public schools to get his or her own city-funded college savings account under a groundbreaking program officials plan to begin rolling out this fall. It will go forward despite the current budget woes that will force layoffs and service cuts in other areas.

According to the story, 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.

"I believe that every single child should be born not necessarily into wealth, but into opportunity," Newsom told the paper. "Once a mind is stretched, it can never go back."

City officials point to a study from the Center for Social Development at Washington University in St. Louis that found children who had just some savings set aside for college were about seven times more likely to go.

The Chronicle writes the college savings program will begin gradually, starting this fall with 1,250 children. Next year, the program is to expand to cover 50% of incoming kindergartners, with full coverage planned for the third year.

Students will get a trust account in their name with $50 from city coffers, or $100 if they qualify for the federal government's free or reduced-price lunch program, city officials said. The plan is to have corporations, nonprofit groups and others offer matching incentives to encourage children and their families to save.

But the paper notes there is the real issue of paying for the program as the city struggles to cope with a historic $483 million budget deficit for the 2010-11 fiscal year. In the first year, the program will cost less than $200,000, and Newsom is expected to include $400,000 in his budget to be submitted next week to the Board of Supervisors to cover the first two years of the program. The cost would increase the following year, though, as the program expands.

Supervisor Sean Elsbernd, often a Newsom ally, said he had opposed a similar idea several years ago and remains skeptical.

"I doubt now is the right time to create a new general fund entitlement program," Elsbernd told the paper, arguing that the social safety net already faces a funding shortfall. Newsom maintains that it is a relatively small appropriation in a $6.6 billion budget and the morally correct thing to do.


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