All Los Angeles first-graders now have a college savings account. Will families use them? | Business News

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A new program is providing all first-graders enrolled in the Los Angeles Unified School District — an estimated 31,000 students — with a free college savings account.

The program, Opportunity LA, launched this week and is aimed at encouraging families to begin saving early for college or other post-high-school education such as trade schools by removing barriers like paperwork and eligibility concerns that might prevent families from starting accounts.

“This program does more than give kids and families a financial boost toward making college more affordable and accessible,” LAUSD Board Vice President Nick Melvoin said in a statement, “it also instills a college-going mindset in our students from an early age.”

The Opportunity LA accounts are similar to those of other programs, like the state-supported ScholarShare529, that offer tax-free savings accounts for college expenses.

Every first-grader in the district receives an account and a $50 seed deposit, regardless of parental income, immigration status or other factors. Families not wishing to participate must opt out of the program.

The city holds all of the accounts so as to not interfere with the public benefits a family may be receiving, officials said.

 

“It’s one additional tool in the toolbox,” said Abigail Marquez, general manager for the city’s Community Investment for Families Department, which helps oversee the program. “It’s a way for the city to partner with the school district to encourage and create a college-going culture in the region and to encourage more young people to pursue post-secondary education.”

Marquez said the program has been in development for a few years, with the department looking at the results of a similar program launched a decade ago in San Francisco under the guidance of Gavin Newsom, who was the city’s mayor at the time.

That program, Kindergarten to College, may offer some insights as to how Los Angeles families may use the accounts and which demographics are likely to benefit most.

According to data on the Kindergarten to College website, current as of February, 23% of the nearly 50,000 accounts in the program have received deposits outside of promotions like the initial seed money. The website states that nearly $6.8 million has been saved so far.

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