Surrounded by city leaders, foundation partners, and kindergartners, San Francisco Mayor Gavin Newsom launched last Tuesday a new initiative that could have a significant impact on the city’s Asian-American community. The pilot, Kindergarten to College, will make San Francisco the first city in the nation to seed college savings accounts for children entering its public schools.
The Kindergarten to College pilot will provide savings accounts for students in 18 public schools this year, and over the next three years will expand to include all kindergartners citywide. Overall, the San Francisco Unified School District (SFUSD) is almost 50-percent Chinese, Japanese, Pacific Islander or Filipino. Several schools participating this year, including Francis Scott Key Elementary, Sutro Elementary and Yick Wo Elementary, have large populations of Asian American students. Gordon J. Lau Elementary is more than 50-percent Asian American.
About 1,200 kindergarten students, or a quarter of the city’s kindergartners, will receive accounts this year. The accounts, which are being seeded with $50 by the city, are designed to create a platform for college savings and encourage more students to pursue higher education.
“We are not just saying every child can go to college. We are now providing families with the financial tools necessary to make this a reality,” said Newsom in a statement.
The city will open the accounts and provide an initial deposit, which will be doubled to $100 for students who qualify for free or reduced lunches. Kindergarten to College will also provide incentives for nonprofit organizations, corporations, friends and family to donate and save.
The city partnered with Citibank to provide the accounts, which will be opened automatically and at no cost to families. San Francisco nonprofit EARN, which specializes in micro-lending for low-income individuals and families, will match $100 for each family who saves $100 in the first year of the program.
“One in three San Francisco children is born into a family with no savings or assets of any kind,” said City Treasurer José Cisneros. “By helping every family open an account and demonstrating the power of savings, we will do much to reduce financial exclusion and increase the chances that more of our children will go to college.”
Although the city acknowledges that its contribution will not cover the full cost of college tuition, leaders hope that simply having an account will be hope in concrete form for students who may otherwise have thought seen college was as out of reach. In San Francisco, 18-percent of public school students never graduate from high school, according to SFUSD statistics.
According to a U.S. Study of Consumer Finances, 20-percent of Asian American immigrants nationally lack a basic bank account. Although Asian Americans have one of the nation’s highest college attendance rates, Asian Americans of certain heritages still face blocks to higher education.
A study by the National Commission on Asian-American and Pacific Islander Research in Education found that only 12- to 13-percent of members of Cambodian, Laotian and Hmong communities in America age 25 and older have a bachelor’s degree or higher. The majority have a high school degree or less, and similar rates can be found among Tongan, Samoan, Guamanian and native Hawaiian communities.
The idea that just having a savings account can make a difference in student’s educational aspirations is supported by a recent study from the Center for Social Development at Washington University in St. Louis, which showed that having a college savings account makes kids seven times more likely to attend, regardless of income or race.
This year about $257,000 has been set aside in the city’s budget to implement the program, providing savings accounts for children.
At Tuesday’s launch, Newsom faced questions about whether the city could afford the initiative, in light of its estimated $460 million budget deficit next year. Newsom responded that the pilot’s cost is negligible relative to a city budget, noting it represented a thousandth of one-percent of the budget, and called the pilot a targeted investment that’s likely to yield much larger returns in the future.
“We’ve already attracted more money than we’ve invested,” Newsom said.
Anne Stuhldreher, a senior fellow with the New America Foundation, noted that despite tough fiscal times, certain investments pay off. The Foundation has worked closely with city officials on the development of the pilot program.
“These are tough budgetary times, and every dollar should be working as hard as it can,” said Stuhldreher. “This will be a small investment with big payoffs later.”