Nonprofit's college savings program to benefit NYC kindergartners
Through a partnership with NYC Kids RISE, the Department of Education is rolling out 529 college savings accounts for 97% of all kindergartners when students return to school this fall.
As kids prepare to return to school this fall, New York City's public school kindergarteners will make a start on their financial futures with their own 529 savings accounts.
Through a partnership with the nonprofit NYC Kids RISE’s Save for College Program, the Department of Education will make the savings accounts, also known as NYC Scholarship Accounts, available to all kindergarteners and their families. Under the program, kindergartners will be automatically enrolled in the savings program and receive an initial $100 deposit. So far, a total $6.5 million has been invested in 65,300 NYC Scholarship Accounts since the program went citywide last year, funded primarily by the city along with private donors.
The accounts allow community organizations, businesses, philanthropic groups and others to make deposits, while the funds remain strictly reserved for academic needs and endeavors, including books, workshops and vocational training courses. Families can also open their own 529 accounts that they can link to their NYC Scholarship Account. When families open and connect their own accounts, NYC Kids RISE will invest another $25 in your child’s NYC Scholarship Account. Students cannot touch the money until they graduate from high school.
New York Nonprofit Media spoke to NYC Kids RISE founder Debra-Ellen Glickstein, to learn more about the benefits of the Save for College Program.
What inspired you to create New York City Kids Rise and how does the organization receive funding for the save for college program? What we have created with the Save For College program, which is a public and private community partnership, is a way for students to start kindergarten in New York City public schools that comes with a financial resource for your higher education, whether that be college or vocational training or otherwise. Starting last year, our platform was expanded citywide. This program is a public/private community partnership with the vision that every kid is going to graduate high school with a financial resource for their educational future, and support along the way from their communities. So it's a twofold objective here and a tool for neighborhoods to come together to accumulate these financial assets and to reinforce expectations about what is possible. [Save for College] was launched in 2017 in one of the most diverse school districts in the city: District 30 in Queens, and then the city decided under the leadership of the Mayor's Office of Equity to take this effort citywide.
As this program is aimed to help students and parents accumulate assets, it's also to increase financial literacy. Why is this important for community building?
All communities should have access to financial tools to accumulate resources over time. And so having financial education is fundamental. We're proud to partner with the Department of Education to support financial education in the classroom for students. This is a tool for students to understand what they have from the earliest of ages. Then they provide financial education and information for families to understand how to make the most of these accounts as well as how to understand how this fits into their broader financial plan. For this, we work closely with the Office of Financial Empowerment.
How do these New York City scholarship accounts help alleviate the burden of student debt, especially students who are from lower income and marginalized communities?
Student debt is a pressing issue for our time. Part of the work with building this universal wealth building platform is for all families to have a resource for college and career from the earliest of ages, and that it provides a mechanism for other entities and institutions communities to add more money into these accounts. There's going to be money and resources to contribute to these to alleviate student debt. The uses of these for New York City scholarship accounts can be used for resources under the New York 529, and that can include computers, books, room and board in many cases, and of course vocational training.
Could you give me a rough estimate of the total assets a typical New York City student would be expected to have by the time he or she graduates thanks to the save for college program?
It really just depends on how different communities engage with the effort. In some cases, they may be putting money in consistently every month. Others, it's a lump sum. In some cases, folks may not be in a position to do that. You're saving for your kids' higher education in the way that is going to make sense for you as part of your financial plan. What NYC Kids Rise puts in is the initial $100 and up to another $200. And then ultimately, different community scholarships can be added to that account. This is a very deliberate way that institutions and others can proactively add money into kids' accounts. One example is we just worked with Flushing Bank in Elmhurst, and they were able to contribute about another $100 in every child's account. So it's those three different pieces of this that contribute.
Going forward, how will the program continue to empower children across New York City?
The key thing here is that there are so many people who came together to make this happen, including Mayor Eric Adams, Sideya Sherman, the Commissioner of the Office of Equity, and Dr. Philip Composto, who's our community superintendent in School District 30. Building this platform for New York City neighborhoods has been about folks from all different places coming together and believing what is possible for all of our children. And so this is literally the ground floor of this effort. Because now that the infrastructure is in place, there's this mechanism across the whole city where folks can now build upon it. The schools can have families view and activate the accounts that tenant leaders can organize to make sure that all their families know about it. So they can actually be connected and take their kids on college trips and learn about financial aid and circle back to local business and rally some businesses to raise money for a specific school with the kids accounts. It’s the beginning of something very special and we’re working with community leaders to figure out how this is going to work and adapt it to each neighborhood.