ASTORIA — The city will open savings accounts for thousands of students in Queens this fall as part of a three-year pilot program that aims to get more kids and families focused on planning financially for college.
The NYC Child Savings Account Program will kick off in September, automatically starting $100 scholarship accounts in the names of all 3,500 kindergarten students in Queens District 30, city officials announced Thursday.
That money will be invested in the state's 529 College Savings Program until the children graduate from high school, when they'll then be able to use the funds for college tuition, books and other higher education needs, officials said.
The new initiative — to be run by NYC Kids RISE, a newly-formed nonprofit — will also help participating families start their own 529 college accounts that they and other relatives can voluntarily contribute to.
The program is being funded with a $10 million donation from the philanthropic Gray Foundation, and is based on findings that low and moderate-income children who have even modest savings accounts are more likely to attend and graduate from college, officials said.
"We know that once families have that savings account, it begins to affect the culture of the family, the behavior of the family," Deputy Mayor Richard Buery said during a press conference at P.S. 171 in Astoria Thursday to announce the plan.
"It's also about educating young people and their families, creating a college-bound culture, education around financial literacy — all of those things help to put our young people on the path to college," Buery continued. "And you've got to start that early."
The pilot will include all public and charter schools in Queens District 30, which spans the neighborhoods of Long Island City, Astoria, Woodside, Sunnyside, East Elmhurst and Jackson Heights.
It will begin with kindergarten students this fall and include around 10,000 students over the next three years, with the hopes of eventually expanding citywide if the pilot is successful, officials said.
The children enrolled starting this fall will automatically get the $100 savings account at no cost, and will have the chance earn an additional $200 for that account if they and their families meet certain benchmark criteria between kindergarten and third grade.
Officials said they are still determining what those benchmarks will be, but may include attendance goals, according to Julie Menin, Commissioner of the Mayor’s Office of Media and Entertainment who will also serve as chair to NYC Kids RISE.
Since the money will be invested in 529 accounts — a state-sponsored college savings program — the funds can grow over time, Menin said.
"In addition, families will have the opportunity to create their own family 529 [accounts]," she added. "We're doing that to really encourage a culture of saving."