July 14, 2011 01:39 PM
By Leigh Phillips, Manager, Office of Financial Empowerment, Office of the Treasurer and Tax Collector, City and County of San Francisco
Savings has a significantly positive effect on children and families -- research has shown that a child with a college savings account held in his or her name is seven times more likely to attend college than one without, regardless of income, race or academic achievement.
However, many children -- one in every three in San Francisco -- will be born into families with no savings or assets of any kind. So, how do we bridge the gap for low- and moderate-income parents in a society where everyone should be able to save and achieve the dream of college?
The government of the City and County of San Francisco is taking bold steps to make college a reality for every San Francisco school child. This year, we partnered with Citi to launch Kindergarten to College (K2C) and very soon after opened more than 1,000 college savings accounts for kindergarteners enrolled in 18 of our public schools. By 2012, every kindergartner entering the city's public schools will receive their own K2C account.
We seeded the accounts with $50 for every child and an additional $50 for lower-income children. Private philanthropy stepped up to fund a $1 match for every $1 a family saves, up to the first $100, and a $100 "Save Steady" bonus (for signing up for automatic online deposits or saving consistently for six months). The K2C accounts are easy to use -- deposits can be made in branch, online or by mail and families can watch their savings grow through an online system.
Getting K2C off the ground was not an easy task. As the first publicly funded, universal, auto-enroll children's savings program in the country, we faced many hurdles. In these tough budget times, we had to fight hard to secure public dollars to fund this program by making the case that this small investment would yield big results. We also needed to design a savings product and find a financial partner willing to open accounts without requiring social security numbers or parent signatures -- Citi stepped up.
In addition, enabling access to K2C beyond the branch was critical. Online access to K2C sits in mysavingsaccount.com, a new website dedicated to children's savings programs hosted by Citi Microfinance. Together, we developed an online portal that seamlessly merged important information about the K2C program with Citi's online savings account functions, which was enhanced to meet with K2C's program objectives. Other cities are similarly interested in introducing student savings programs and we are already both sharing our experience with K2C widely.
Through its partnership with the K2C program, Citi is demonstrating a long-term commitment to community development and the economic empowerment of San Francisco's low- and moderate-income families. We believe that K2C will increase academic aspirations by making college a reality from the first day of school. As the program motto says, "Save Steady, Dream Huge."
The San Francisco Treasurer's Office of Financial Empowerment leverages the power of City Hall to increase access to the financial mainstream, create opportunities for saving, and build and protect the wealth and assets of low-income San Franciscans.