College funds for NYC’s kindergartners: How to get and give seed money for higher education

In January, all New York City’s public school kindergartners will receive a seed investment of $100 in their city-sponsored college savings accounts. 

It’s the second year that 5-year-olds citywide will automatically get the NYC Scholarship Accounts — a giant experiment aiming to help thousands of families who historically have faced steep barriers to postsecondary education. 

The push has some research to back it up: In addition to the tangible benefits the money itself brings, the act of opening a college account for a young person has intangible benefits of motivating kids to focus on educational achievement and getting to college. 

“The research suggests: Just having a small-dollar account, you’re three times more likely to go to college and four times more likely to graduate,” said Debra-Ellen Glickstein, founding executive director of NYC Kids RISE, a nonprofit that manages the Save for College program in partnership with the city’s education department.

And children who attend college tend to earn higher salaries and are less likely to be unemployed, research shows. This has exacerbated the racial wealth gap: A typical Black or Latino family has a net worth only about a tenth of a typical white family’s, according to Brookings. Addressing these disparities has propelled a big push for publicly funded college saving programs across the nation. Roughly 1.2 million children participate in more than 120 programs across dozens of states, according to a Prosperity Now analysis of 2021 data.

The centerpiece of New York City’s program focuses on making the college-bound effort a communal one, by creating grassroots-led “scholarship” opportunities for children to earn more money in their accounts in various ways, including through civic associations, PTAs, local businesses, or philanthropies. For example, two churches in Long Island City and Astoria organized a “Concert for College,” a Black History Month gospel concert to raise money for the accounts of students at eight schools in their neighborhoods, many of whom live in public housing. About 1,000 people attended the concert, which raised $18.86 for more than 1,000 kindergarten and first graders, according to Glickstein. The churches are planning the concert again for February. 

“At its essence, it’s a decentralized wealth-building platform for New York City neighborhoods,”  Glickstein said. For her, it’s been powerful to see the efforts like the concert chip away at the barriers to college for families who have historically lacked access “not because it’s an act of charity but because it’s a collective responsibility.” 

Here’s what else you need to know about the program:

When did the program start?

NYC Kids Rise piloted the program with support from the Gray Foundation in 2017 in Queens’ District 30 — which includes Long Island City, Astoria, East Elmhurst, Jackson Heights, Corona and Woodside. Last year was the first time the program expanded to all public school kindergartners. The program expanded from about 3,000 kids to more than 74,000.

Who is eligible?

All New York City kindergarten students in district and charter schools will automatically be enrolled in the program as of January. To activate their accounts, they should visit the NYC Kids Rise website and click an “activate account” button. Once a family activates the account, they earn another $25 as a reward.

If families don’t want to participate, they can opt out. About 97% of the city’s first graders, who started with the program last year, are participating in it, Glickstein said.

To activate the account, families will need an email address plus their child’s date of birth, ZIP code, and the nine-digit number used to activate their child’s MySchools account. All families can be part of the program regardless of income or immigration status. (No social security numbers or credit card numbers are needed.) Instructions are provided in nine other languages.

“This was very much designed on purpose to maximize inclusivity and ease,” Glickstein said.  

How does the account work?

The money is invested in the state’s 529 plan, a college-savings account that accrues interest over time — the compound interest is earned on the original balance plus on the interest earned over time, which is why it’s important to start the investment early. 

The money can only be used for higher education purposes, including college, trade schools, and online degree programs. It can be used for tuition, some room-and-board costs, and textbooks. 

If a student does not claim the funds within 20 years after completing kindergarten, the money goes back to NYC Kids Rise to be used for other scholarships in the program, the organization explained. 

How can you get more money in the account?

Money can only be put in the account through NYC Kids Rise, but families will have opportunities to earn rewards over time, starting with the $25 they get upon activating the account. If a family opens their own 529 college savings account and links that tax-deferred account to their NYC scholarship account, they can earn another $25. Kids Rise offers step-by-step instructions for opening a 529, including how-to videos in several languages to help families. (The organization continues to advocate for the state’s 529 online application and materials be translated in the nine languages most used by city families since language access remains a barrier to get an account.)  

When families deposit at least $5 in their own accounts, NYC Kids Rise will add another $25 to the scholarship account.  Once a child is in first grade, the program will match up to $100 of a family’s investment into their own account.

With the seed and reward money, plus community scholarships, NYC Kids Rise estimates that an account of an average kindergartner might have about $3,000 for college and career training by the time that child graduates high school. 

Who can contribute to the scholarships?

Individuals as well as organizations can help support the scholarship program through the NYC Kids Rise donations page. Donations will be pooled with others to support future community scholarships across the five boroughs.

The program is hopeful to see communities get creative with targeted campaigns to support kids’ educational futures. So far, the program has seen 21 community scholarships, including the concert organized by the two Queens churches. 

Another effort led by the Astoria Houses Resident Association raised $1,000 for every kindergarten, first, second, and third grader in its public housing complex who attended one of the school’s in the program’s pilot program. A group of Brooklyn parents who recently sent their kids off to college banded together through a donor-advised fund to support children at P.S. 92 in Corona Queens, awarding $60.48 to nearly 250 first and second graders from the pilot program.

Most recently, 1,200 first graders in East Flatbush and Canarsie, Brooklyn, received $1,000 in their NYC Scholarship Accounts thanks to a $1.2 million donation from Bloomberg Philanthropies’ Greenwood Initiative and Brooklyn Community Foundation’s Donor-Advised Funds. (Bloomberg Philanthropies is a Chalkbeat donor.) This initiative selected Brooklyn’s District 18 because its neighborhoods are at least 86% Black, the largest proportion across the city.

NYC Kids Rise helps groups interested in creating community scholarships for specific groups of students (for more info reach out to communityscholarships@nyckidsrise.org), and the organization deposits the donations into the student accounts.

Amy Zimmer is the bureau chief for Chalkbeat New York. Contact Amy at azimmer@chalkbeat.org.