College Savings Accounts Set San Francisco Children on Path to College-Going Identity and Lifelong Saving

DCYF envisions a San Francisco where all youth are ready for college, work, and a productive adulthood. This goal is one of the four result areas we identified in our Community Needs Assessment, and a fundamental condition for children, youth, disconnected TAY, and their families that DCYF and our partners have an active role in cultivating and sustaining.

Youth who complete postsecondary education are more likely to gain access to high-wage jobs and extend the benefits of those jobs to their families and communities. Higher levels of schooling are associated with lower risk of unemployment, decreased dependency on government assistance, and lower incarceration rates.

The U.S. Census Bureau estimates that 58.8% of San Francisco residents who are 25 or older have a bachelor’s degree, compared to 34.7% in California and 32.9% nationally. For young people looking to gain a foothold in San Francisco’s recovering economy, it will be increasingly difficult to be a competitive candidate for employment without a bachelor’s degree. Beyond San Francisco, recent reports indicate that in less than ten years approximately 40% of jobs in California will require a bachelor’s degree. It is more critical than ever for youth to have access to higher education and the support they need to complete it.

Savings — even small amounts — can improve the odds that children and youth will make it to and complete college. Children with savings accounts will be up to seven times more likely to attend college than those without an account, with the largest effects among households of color, lower incomes, and lower parental education. People are more likely to save money as adults if they saved in childhood, and having a savings account in childhood lays a foundation for connecting to assets in adulthood such as retirement accounts, real estate, and other investments. Saving money is also linked to increases in math scores among youth, better health and education outcomes, and the development of a “future orientation.”

Given the importance of creating savings habits and cultivating college-going identities from an early age, San Francisco’s children and youth are incredibly fortunate to have access to three critical programs: Kindergarten to College, CalKIDS, and the ScholarShare 529 Savings Account Program.

“A Future Worth Saving For” — Kindergarten to College

San Francisco’s Kindergarten to College program (K2C) is the first universal Child Savings Account program in the country. Founded in 2011 by then-San Francisco Mayor Gavin Newsom and Treasurer José Cisneros, K2C automatically opens a savings account seeded with $50 in public funds for every child entering kindergarten in San Francisco’s public schools, putting students on a path to college from their first day of school.

K2C is both automatic and universal. When a student enters kindergarten in the San Francisco Unified School District, K2C automatically opens a deposit-only savings account in the child’s name at Citibank, and deposits $50 in their account. There is no paperwork to fill out, and the program does not use social security numbers. For some San Francisco families, their account with K2C is their only formal bank account with a financial institution.

Families with a K2C account can begin saving for post-secondary education immediately by visiting a local Citibank branch, through direct deposit, mail, or via an online transfer. K2C accounts grow through contributions, scholarships, and gifts: perfect for the SFUSD student in your life who has a birthday coming up! Students and families can also access additional incentive dollars by engaging with their accounts, viewing their balance online, and participating in other activities. The excellent Your K2C Account page includes information about everything K2C account holders and their families need to know about managing their accounts.

K2C has demonstrated for more than a decade that universal and automatic children’s savings account programs are possible, effective, and scalable, and has inspired children’s savings accounts on a larger scale.

“The First Step Toward College” — CalKIDS

One of the many college savings accounts programs that was inspired by K2C is the California Kids Investment and Development Savings Program (CalKIDS), a children’s savings account program administered by the state of California. The goal of CalKIDS is to help children in California get access to higher education, especially those from traditionally underserved communities. CalKIDS aims to promote a college-going mindset in all California children, provide families an initial seed deposit to jump start personal savings, help families establish a positive pattern of saving while their children are young, and support families to rely less on student loan debt when they’re ready to send their kids to college.

Eligible beneficiaries are identified by the California Department of Public Health and the California Department of Education, and enrollment is automatic: no action or financial commitment is required for families to participate.

CalKIDS targets two groups of Californians:

All newborns born in California after July 1, 2022 will have accounts opened for them — universally. This will include a $25 base deposit, with up to $75 extra in incentives when parents register an online account and take other actions. Once low-income children from this cohort reach first grade at public school, the intent is to make base and supplemental deposits into these accounts.

Starting in the 2021–2022 academic year, California public school students in grades 1–12 who were identified as low-income — as defined by the Local Control Funding Formula — were automatically enrolled in CalKids. Beginning in fall 2022, all incoming low-income public school first graders are automatically enrolled in CalKIDS. Low-income students will receive a base deposit of $500, with supplemental deposits of $500 each for homeless and foster youth, for a total of up to $1,500.

While CalKIDS and K2C are the start of the college savings journey for many San Francisco families, another resource managed by the State of California serves as the extra boost that many families need to augment the money that they save for college.

“The California Way to Save for College”- ScholarShare 529 College Savings Plans

ScholarShare 529 serves as California’s official college savings plan. Administered by the ScholarShare Investment Board of the state of California, ScholarShare 529 provides families with a diverse set of investment options, tax-deferred growth, and withdrawals free from state and federal taxes when used for qualified higher education expenses, such as tuition and fees, books, certain room and board costs, computer equipment, and other required supplies.

K2C and CalKIDS account holders are allowed to link their accounts to ScholarShare 529 college savings accounts, which can maximize their savings.

Through December 31, 2022, ScholarShare 529 is offering a Matching Grant Program that will provide eligible families a dollar-for-dollar match in contributions of up to $200. To be eligible, families must be California residents, have valid Social Security Numbers or Federal Tax Identification Numbers, and earn $75,000 annually or less. The beneficiary of the account must be 14 years of age or younger. Families that establish monthly recurring contributions of $25 or more when opening an account will receive an additional $25. These funds grow 100% tax-free and can be used at any accredited higher education program, including community colleges and trade schools.

DCYF is proud to partner with K2C, CalKIDS, and ScholarShare 529 in our work to ensure that all San Francisco youth are ready for college, work, and a productive adulthood. Our collective efforts put children in the mindset from an early age that they can and will attend college, that they can dream big and make those dreams a reality, and that their futures — and those of their families and communities — are on the path to be full of opportunities and fulfillment. A city that does this for its children and youth is indeed a great place to grow up.

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Making San Francisco a great place to grow up, DCYF has led the City's investments in children, youth, TAY and their families since 1991. www.dcyf.org

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SF Department of Children, Youth & Their Families

Making San Francisco a great place to grow up, DCYF has led the City's investments in children, youth, TAY and their families since 1991. www.dcyf.org