LA Chugs Ahead With Plan To Fund Kindergartner Savings Accounts

LOS ANGELES, CA — A proposal to develop a savings account program for students in the Los Angeles Unified School District took a small step forward Tuesday.

The City Council's Health, Education and Neighborhood Councils Committee approved a plan to have the Los Angeles Housing and Community Investment Department, with the assistance of the city's new consultant on the project, Prosperity Now, return within 30 days with an analysis of a report that was produced last year by the Office of the City Administrative Officer on the potential program.

Under a version of a savings program outlined in the CAO report, $50 would be deposited in a savings account for each kindergartner when he or she is enrolled 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 a child graduates, according to the report.

"This is a no brainer. This has been done at various cities and states with positive results," said Councilman David Ryu, who introduced the motion on creating the program and is also chair of the committee.

The committee also for the first time heard from Prosperity Now, a consulting and advocacy firm the City Council hired in December that has developed similar programs for other cities.

Erin Thiemann of Prosperity Now told the committee that research shows child savings accounts can increase a student's likelihood of attending college, and 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.

Ryu said he expected Thiemann to appear before the committee "again and again" and that he "looks forward to our continued conversation."

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 CAO report is that the 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.

City News Service; Photo: Shutterstock