(CNN) — Saving for college isn’t easy, especially with the rising cost of tuition, so the city of Boston is giving students a head start on the first day of school this year.
Every kindergartner enrolled in Boston Public Schools will receive a savings account with $50 in it to help pay for college or career training, the city announced Monday. The program, called Boston Saves, is an expansion of a three-year pilot program.
“Boston Saves has proven to be an essential part of providing families with the tools to save for their children’s post-secondary future,” said Boston Mayor Martin J. Walsh in a statement. “I am pleased to announce the citywide expansion of Boston Saves, providing more families with these resources and strengthening the investment we are making in Boston’s youth.”
The city-wide program aims to provide broader access to college and careers for Boston families and to create a culture where students begin preparing earlier for life beyond high school. City officials cited a 2013 Washington University in St. Louis study that found that a child from a low-to-moderate-income home with at least $499 in their account before reaching college age “is more than four times more likely to enroll in college than a child with no savings account.”
How Boston Saves works
Boston Saves is intended to encourage families to engage in better financial planning.
The money can be used for college or career training, officials said. Neither the student nor the family can access the money until the student enters college or career training. The school division’s website says the student must use the money before they turn 27 or the money will go back to the city of Boston.
The program also offers incentives for families to earn and save what it calls “Boston Saves Dollars.” Families can earn more money by performing tasks, including contributing $25 over a three-month period and reading 20 days a month with a child within a three-month period to earn $5 in Boston Saves Dollars. Families can also link an account — savings, checking or 529 — and earn $25.
“My family’s participation in the Boston Saves program has brought up important family discussions about college and financial planning early on,” Esmirna Soto, the parent of a student who participated in the Boston Saves pilot program, said in a news release from the city of Boston.
“He benefits by knowing that we are not only expecting him to attend college or some form of higher education, but that we are also financially planning for it,” Soto said.
Massachusetts is starting a statewide savings program
Massachusetts is launching a statewide program to help families start saving for post-high school education and training.
The program expands on a 2016 state initiative known as SeedMA that gives kindergartners in two school districts a $50 deposit into a Massachusetts 529 savings account.
Similar Children’s Savings Account (CSA) programs can be found in cities in 34 states, including Nevada, Texas and Michigan, according to the nonprofit organization Prosperity Now.