How Two Cities Are Investing in the Future
Durham, North Carolina, and St. Louis, Missouri are developing city-wide Children's Savings Accounts (CSA) initiatives that can build college-going communities and disrupt cycles of multi-generational poverty.
This is a guest post by Lily Roberts.
Children’s Savings Accounts (CSAs) are emerging in cities as a way to help even the most low-income children and families save for college and to potentially disrupt cycles of multi-generational poverty. When higher education becomes an expectation as early as kindergarten, parents save and children know that college is an attainable goal.
CSAs often include an initial deposit into a savings account for young children, incentives for children and their parents to save, and opportunities to engage parents and children through financial education and other activities. Research shows that when a child has a savings account – even if that account holds less than $500 – he or she is three times more likely to enroll in college and four times more likely to graduate.
Cities have an important role to play in developing city-wide CSA initiatives, and some city leaders are already paving the way for children in their cities to save for college. While San Francisco created the first city-wide CSA initiative, Kindergarten to College, other cities are following San Francisco’s lead and developing their own unique approaches.
City leaders participating in a National League of Cities CSA Learning Collaborative have found that promising strategies can vary depending on city size, budget, demographics, and political realities. Participating cities are developing innovative strategies that include initial pilot programs, linking the CSA initiative to other goals on the city’s agenda, and finding new ways to engage families.
Two Learning Collaborative cities that recently launched their CSA programs – Durham, North Carolina, and St. Louis, Missouri - exemplify the diversity of approaches to CSAs in cities with similar goals. Durham: A Targeted Effort for a Single Neighborhood In Durham, the Mayor’s Office and the East Durham Children’s Initiative are joining forces as part of a targeted effort to improve the quality of life within a high-poverty census tract in the city. At Y.E. Smith Elementary School, 75 kindergarteners will start the 2016-17 school year with a savings account containing an initial deposit of $100 funded by the Corporation for Enterprise Development’s 1:1 Fund.
Money raised from community members in Durham will match parental contributions, up to an additional $100. Each year, a new kindergarten class at Y.E. Smith will join the program. For Councilmember Steve Schewel, promoting college access for all children in a city known for research and education is a vital way to build opportunity. “Kids with college savings accounts learn to consider themselves as future college students,” Schewel explained. Organizers plan to expand the program to other elementary schools throughout Durham. The initial focus on one school seeks to make a big impact in a small neighborhood.
St. Louis: A City-Wide Approach In St. Louis, Treasurer Tishaura Jones has a goal to reach all children in the city with opportunities to save. Through College Kids, a program out of the new Office of Financial Empowerment, the city is providing $50 to seed a savings account for all 3,100 children enrolled in a St. Louis public or charter school kindergarten.
The program, which is partially funded through the city’s parking meter revenue, includes incentives paid for by local businesses and philanthropies. These include $1 per week deposited into the account for perfect attendance, matching up to $100, and bonuses tied to financial education courses for parents.
According to Treasurer Jones, "College Kids provides an opportunity for students to get a jump start on college savings, and encourages parents and guardians to increase their financial capability through participation in financial education courses." These emerging programs in Durham and St. Louis are pioneering new strategies as they build college-going communities in which all children see postsecondary education as their path for the future.
A handful of other cities are following close behind and learning from their peers about the importance of building strong partnerships with schools, businesses, and community organizations, as well as promising strategies to engage families and provide appropriate financial education. As more cities follow suit, CSAs have the potential to make a huge impact in preparing our nation’s children for bright, successful futures.
Lily Roberts is an intern with the Family Economic Success division of NLC's Institute for Youth, Education and Families.