Los Angeles officials introduced a new plan on Friday that provides free $50 saving accounts to first-graders enrolled in the city’s public education system.
The Opportunity L.A. program is a partnership between the City and County of Los Angeles and the L.A. Unified School District (LAUSD) to provide free college savings accounts to approximately 13,000 students in 196 schools this spring before expanding to more than 35,000 schoolkids on 519 campuses in the fall. All first-grade students who choose to participate are expected to be enrolled in the program by the end of this year.
“This is an investment and a vision, to not just say you’re important, but to prove it by putting the resources in the pathway in all of our zip codes for all of our people,” said L.A. Mayor Eric Garcetti, a Democrat, at a press conference on Friday. “This is about racial justice. This is about economic opportunity. This is about a stronger economy.”
“You can concentrate on your studies,” the mayor told students in attendance. “Don’t worry about being priced out of an education.”
The initiative, which has been in the works for years, is funded in part by the California Student Aid Commission, the mayor’s budget, and a contribution of more than $1 million from L.A. City Council President Nury Martinez’s reinvestment funding program. It is overseen by the city’s Housing + Community Investment Department and advertised as “the largest Children’s Savings account program in the nation.”
According to EdSource, “the cost to fund students’ saving accounts during the first year would exceed $666,000, plus administrative, outreach and other related costs.”
“A child with a college savings of a dollar to $499 is three times more likely to go to college and four times more likely to graduate,” said Martinez on Friday. “However, 40% of families do not have $400 in their savings account to even address an emergency — let alone having a savings account to go to college.”
Martinez told reporters that the pandemic has shown “why we need ‘Families First’ policies.”
Students will automatically receive a deposit-only Citibank savings account in their name with an initial deposit of $50, regardless of their parent’s income or immigration status. Families can make deposits into the accounts, but the accumulated funds are intended only for college or vocational training after the students graduate high school. A student, parent, or guardian may request early withdrawal in the case of a family emergency, but restrictions apply.
There are no banking fees, and officials emphasize that the accounts will have “no impact on public benefits or eligibility” and cannot be counted as part of household income.
Nick Melvoin, a school board member, said the new strategy is “truly starting to close the gaps and helping to plant the seeds early so our kids know that college is possible and is expected.”
Families that do not wish to participate can submit an opt-out form during enrollment.