L.A. to Explore Options for Student Saving Program

By City News Service

The City Council on Monday unanimously approved hiring a consultant to provide analysis and recommendations on the creation of a savings account program for students in the Los Angeles Unified School District.

The council’s vote authorized that the nonprofit Prosperity Now, a consulting and advocacy firm that has developed similar programs for other cities, be hired for $80,000 from Councilman David Ryu’s discretionary funds to help craft a savings program.

Ryu, who introduced the motion, has pointed to research that shows child savings accounts can increase a student’s likelihood of attending college.

The motion that authorized the hiring of a consultant said that according to the Center for Social Development at Washington University in St. Louis, a low- to moderate-income child with $500 or less designated for school savings is three-times more likely to enroll and nearly four-times more likely
to graduate from college than a child with no savings.

“If only 10 percent more Angelenos got a college degree, it would increase federal, state and local tax revenue by more than $580 million dollars annually,” Ryu said before the vote.

Under a potential version of a savings program outlined in a city staff report, $50 would be deposited in a savings account for each kindergartner when they enroll in a district school, and that contribution could potentially be matched by private donors.

The cost could be between $2.7 million and $3.4 million annually for the city, and the account could grow to hundreds of dollars by the time the child graduates, according to a city staff report.

“Prosperity Now is thrilled that L.A. is joining other leading cities by investing in the futures of children in their community,” said Carl Rist, senior director for Children’s Savings and senior advisor for Asset Building at Prosperity Now. “We’ve seen time and again the impact that a child’s savings account can have in building aspirations and savings for college. We look forward to working with the city of L.A. to build a state-of- the-art CSA program.”

Similar programs to the one under consideration exist or are being developed in Boston, New York, San Francisco, St. Louis, and other municipalities, according to Ryu’s office.

One potential problem noted in the staff report is that LAUSD does not just cover Los Angeles, but includes all or part of 31 smaller cities, including West Hollywood and San Fernando.

If the city created a program for all the district’s students, it would be giving money directly to thousands who are not residents of the city, which “may pose operational and legal challenges” in replicating programs in other cities, the report said.

The district had roughly 44,000 students in kindergarten last school year within the city’s boundaries, but 55,000 districtwide. If the city were to donate $50 per student, it would cost $2.7 million per year for students who live in Los Angeles or $3.4 million for all of the district’s students.
 

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December 13, 2017  Copyright © 2012 Eastern Group Publications, Inc.

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