Eric Garcetti, a Democratic Mayor of Los Angeles, has recently introduced a saving account policy aimed at the youngest students in Los Angeles.
The program involves providing free savings Citibank accounts to each first-grade student from the L.A. public education system.
Each saving account will include the U.S. $50 initial deposit, meant to help students in further education.
Adding funds to the saving account would be allowed for future college or vocational education only.
Families would be permitted to request money withdrawal only if they provide sufficient proof of emergency.
Distributing deposit-filled accounts to students
There would be no banking fees related to the account, and the funds on the saving account would not be included in the household income records.
Families who are not interested in the program could easily withdraw themselves from it.
Mayor Garcetti described the program as ‘an investment and vision’ meant to show that the city government values L.A. families regardless of background.
He said that the policy is about ‘racial justice, providing economic opportunities, and strengthening the economy.’
The L.A. Mayor told students that they can now start focusing on their studies without worrying about paying high prices for their education.
A school board member Nick Melvoin told reporters that the new policy started helping bring down the inequalities between students and making them know that they would have an opportunity to go to college.
The scope and the funding of the program
This spring, the saving account program is expected to cover around 13,000 students from 196 public schools in L.A.
When the new academic year begins in the fall, it is estimated that the program would involve about 35,000 students from 519 institutions.
Each first-grader willing to participate in the program would have to enroll in the program by the end of 2021.
The program would be jointly funded by the mayor’s budget, the California Student Aid Commission, and the donation of the U.S. $1 million from the reinvestment funding program supported by L.A. City Council President Nury Martinez.
Commenting on the saving account policy, Martinez emphasized that children with saving accounts are much more likely to attend college.
She added that nearly 40 percent of families do not have more than the U.S. $400 saved for emergency purposes, let alone education.
EdSource, a non-profit organization focused on education in California, estimated that around the U.S. $666,000 would be spent on saving accounts during the first year of the program.
This amount excludes other costs, such as those of administration and outreach.
Only time will tell whether the outcome of the policy would be worth these investments.