This year, every kindergartner from Cesar Chavez Elementary School and 18 other participating schools in San Francisco will have a college savings account in their name.

Mayor Gavin Newsom, Treasurer Jose Cisneros and Superintendent Carlos Garcia, along with other city leaders, recently launched the Kindergarten to College Financial Savings Program, a citywide college savings program for kindergartners enrolled in public school. Citibank will create, open and manage the accounts for the 1,200 students expected to participate.

In the next two years, San Francisco will make the program available to every kindergartner in public school.

San Francisco’s program is modeled on international programs developed for poor families in countries such as Canada, Korea and Singapore, said Bob Friedman, founder of the Corporation for Enterprise Development.

“I have to give San Francisco credit for deliberately setting out to learn from what has gone on before,” Friedman said.

K2C Program

The kindergarten savings program was developed based on the findings of a study published by Washington University in St. Louis, which found that children were seven times more likely to go to college if they had a savings account, said Maureen Carew, director of SF Promise for the San Francisco Unified School District.

The research also found that the amount saved in an account did not have a significant effect on college attendance, according to the report that was published in January 2010.

Another influence was the UK Child Trust Fund. In the United Kingdom, every child is given his or her own savings account at birth. This type of policy is currently being considered in the U.S. Congress, according to the report.

Out of the 18 schools participating this year, Cesar Chavez is the only one in the Mission District. Schools were chosen based on free and reduced lunch data and geographic location — one school from each supervisorial district, Carew said.

When children enter a participating kindergarten, the City of San Francisco will open an account in the child’s name at Citibank and make an initial deposit of $50. Parents and other institutions are encouraged to match the donations. If a child qualifies for free and reduced lunch, the city will award them an additional $50.

The process is automatic — eventually every kindergartner will have a savings account for college, Carew said. Currently, parents are encouraged to fill out an application to help determine and document that their child is eligible for the additional $50. So far, 85 out of the 88 kindergartners at Cesar Chavez have filled out an application.

Thirty-four more schools will be phased into the program next year, and by 2012 all schools that have a kindergarten will participate, Carew said.

One of the biggest challenges Carew expects the city to face is from immigrant families who fear that registering for the program will expose their status. Families need not be documented to open an account for their children, she said. None of the family’s information will be released to anyone.

Similar Programs

The Corporation for Enterprise Development, a nonprofit organization based in Washington, D.C., that works toward economic development for low-income families and communities, launched a similar research program, called the Savings for Education, Entrepreneurship and Downpayment (SEED) Initiative, in 2003.

“We wanted to prove whether or not child savings accounts worked,” Friedman said.

They found enrollment was challenging when the accounts were not opened automatically.

The reasons were multiple: Parents did not trust financial institutions or the government, did not want to share financial information, and were embarrassed at their lack of financial knowledge.

Using this information, researchers randomly selected 1,361 children in Oklahoma and automatically opened accounts for them at birth in 2008.

Unlike the group that was not automatically enrolled, this group’s progress has “proceeded smoothly.”

The Child Development Accounts were opened with an initial deposit of $1,000 using the State College Savings (529) plan. Researchers will continue to follow the progress of the accounts and students through 2014.

“These assets are hope in concrete form,” Friedman said. “Just having money in an account tends to orient kids to know that they are going to college.” It may be that financially the amount isn’t enough to send someone to college, he added, but psychologically it’s enough.

The accounts have grown: After three years, the participants had an average of $1,500 in savings.

That amount covers 60 percent of a year of tuition at a community college, according to the report. If the savings accumulation continues at the same rate from birth to 18 years of age, participants will save more than $6,000, enough to cover two years of community college tuition.

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Patty Espinosa, from the border town of Mission, Texas, feels at home with the Mission's Latino culture, humming along to the mariachi songs playing during her lunch break. Hearing workers at a taqueria shouting "gritos" convinced her the Mission is unlike any other neighborhood in San Francisco.

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