Establishing a savings account program for kindergarteners in the Los Angeles Unified School District could cost between $2.7 million and $3.4 million annually, according a report approved Monday by a City Council committee.
The program is currently being explored by the City Council, and the report from the chief administrative officer outlined the cost and other factors to be considered if the city implements the idea.
Research shows that child savings accounts can help expand educational and economic opportunities for low- to moderate-income families and increase a youngster’s likelihood of attending college, according to the report.
“Everywhere I go, every time I mention this, everyone is interested in this,” said Councilman David Ryu, who introduced the motion asking for the report. “We would be the first large city to implement such a program, but it is proven it works. Everyone I talk to wants to partner on it.”
Under such a program, $50 would be deposited in a savings account for each kindergartener when they enroll in a district school. With even minimal deposits until the child graduates high school, the account could grow to hundreds of dollars.
The report also asked for budget money to be cleared so the Housing and Community Investment Department can hire a consultant to prepare a study on how the program could be implemented.
One potential problem noted in the report is that the LAUSD does not just cover the boundaries of the city of Los Angeles, but includes all or part of 31 smaller municipalities such as West Hollywood and San Fernando. This “may pose operational and legal challenges” in replicating programs in other cities, the report says.
The district currently has roughly 44,000 students in kindergarten this year within the city’s limits, but 55,000 districtwide. If the program were just for students within Los Angeles, it would cost $2.7 million per year, or $3.4 million for all district students, the report says, while noting that private foundations or donors could also be utilized to reduce the cost to the city.
The council motion asking for the report said “narrowing the gaps in college participation, and increasing financial opportunity and security across income groups, are vital to the continued growth of our city. The rapid growth of children’s savings accounts illustrates that even modest asset ownership — something as simple as a savings account — can increase financial security and expand opportunity for the next generation of Angelenos and the adults in their lives. Given this potential, it is incumbent that we explore the feasibility of establishing such a program in Los Angeles.”
—City News Service
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