Acting on a motion by Supervisor Mark Ridley-Thomas, the Board of Supervisors voted unanimously to explore the feasibility of creating a Children’s Savings Account program – an investment that would pave the way to college for many students.
Children’s Savings Accounts (CSAs) are long-term asset-building financial tools that are established for children early in life. The accounts are seeded with an initial deposit and built through contributions from family, friends, and the children themselves. At age 18, CSA savings are typically used to fund higher education; but the savings can also be used for other asset-building purposes, such as purchasing equipment to start a small business.
“We must be creative in our approach to opening up viable avenues to postsecondary education and sustainable career pathways,” said Supervisor Ridley-Thomas. “One of the most critical investments we can make is in human infrastructure, most notably in enhancing the self-perception and well-being – financial and otherwise – of children.”
“Saving for college early can help build positive, lifelong financial habits,” said Supervisor Hilda L. Solis, who co-authored the motion. “By enabling youth to build college savings and raising their educational expectations, Children’s Savings Accounts can put a college or trade school education within reach. With families and students struggling to afford the rising costs of college, any action to alleviate this burden can help create a pathway to success.”
A college degree has become increasingly important. Three decades ago, full-time workers with a bachelor’s degree made 40 percent more than those with a high school diploma – last year that number reached 83 percent. Meanwhile, the number of jobs requiring a post-secondary degree has more than doubled. Today, according to the US Census Bureau, only 32 percent of Angelenos have a bachelor’s degree.
Under the proposed initiative, Los Angeles County (County) would form a partnership with the City of Los Angeles to help fund a CSA program for first grade students enrolled at schools in the Los Angeles Unified School District (LAUSD). Councilmember David Ryu, who has already laid the groundwork for the City’s CSA program said, “it’s well past time that we start thinking outside the box to develop policies that boost college readiness, attendance, completion rates, and ensure our students have a fighting chance in today’s and tomorrow’s economies.” He added, “this vote represents a critical next step toward making higher education a reality for children across Los Angeles.”
In June 2018, the LA Unified Board of Education approved a resolution directing LAUSD Superintendent Austin Beutner to develop a CSA plan. “We are excited to have LA County as a partner in our goal to provide college savings accounts to all first graders across the county,” said LA Unified Board Vice President Nick Melvoin, the resolution’s author. “This step toward preparing kids for college and careers may start with a small, simple investment, but it has the potential to produce big, life-changing results for our students.”
Supervisor Ridley-Thomas discussed the proposal with Superintendent Beutner during a joint visit to Crenshaw High School in Los Angeles on Tuesday, the first day of school after the summer break. “As we fulfill our promise to provide all students with a high-quality education, we must also build a framework to support their long-term success by helping families pay for college beginning when their child is in first grade,” said Superintendent Beutner. More than 80% of LAUSD families live below the poverty line.
The motion also directs County staff to consider other populations that could benefit from a CSA program, such as foster youth.
Over the past decade, the number of CSA programs subsidized by government has rapidly increased. For example, the City and County of San Francisco have launched such a program in partnership with the school district. Research has shown that the mere opening of a CSA can increase the likelihood of college attendance: low and moderate-income children with college savings between $1 and $499 are three times more likely to attend college. Furthermore, the existence of a CSA was found to deepen a parent’s belief that his or her child will attend college.