Why I’m giving $50 to every new child born in Massachusetts
College savings plans deliver lots of dividends
Originally published in Commonwealth Magazine
OVER THE LAST DECADE, I’ve created three non-profit organizations with the shared mission of getting low-income students to college without taking on crushing debt. I’ve seen the life-changing impact a college education can have for students who grow up in poverty. So when Treasurer Deb Goldberg announced a new statewide college savings account program for Massachusetts children last week, I was there to pledge the initial funding.
Under the children’s savings account program SeedMA Baby, every child born or adopted as a Massachusetts resident will be eligible for a college savings account with a $50 initial deposit. I am committed to funding this initial deposit for the first 6,000 children to open a college savings account through the program.
This is a challenge grant. I hope other foundations and philanthropists will join me in pledging additional resources in order to motivate families to open these accounts and save for their children’s future.
Children’s savings accounts are about much more than just the rising cost of college. Research shows that these accounts are a highly effective tool to promoting financial security in low- and moderate-income families, and even more importantly, raise the hopes and aspirations for the future of children and their parents.
In fact, children’s savings accounts are a particularly evidence-driven public policy. A 10-year national Savings for Education, Entrepreneurship and Downpayment (SEED) demonstration project run by the Center for Social Development at Washington University and the University of Kansas School of Social Welfare demonstrated their undeniable success. Dozens of other academic studies, pilot programs, and research initiatives have shown that these accounts have an enormous impact. Here are some important findings:
- Children with college savings of as little as $1–499 are three times more likely to attend college and four times more likely to graduate.
- Children with college savings have greater college expectations and are more likely to see themselves as college-bound.
- Children’s savings accounts have several positive impacts on young children and their mothers, including reducing symptoms of depression in mothers and improving children’s early socio-emotional development.
To be clear, these savings alone will never be enough to catch up to increasingly higher tuitions fueled by the easy availability of student loans. The fight for an accessible and affordable higher education system will not be won with children’s savings accounts alone.
While we work to address the growing crisis of student debt, it is critical to have a universal statewide program that encourages all families to make college a goal for their children by saving money from birth. I am incredibly proud to provide the initial funding for Massachusetts’ children’s savings account program. I’m eager to see other funders step forward to help us meet this crucial challenge of giving all young people in the state a pathway to college.