Getting a head start on college savings
MPS kindergartners will receive $25 in account
When 5-year-olds start kindergarten at MPS next fall, they will already have a start on saving for college in the form of $25 in seed money deposited into a master savings account.
Funds for the College Savings Account Initiative have been accumulating through the city, which has invested $75,000, and from Milwaukee Public Schools Superintendent Darienne Driver, who committed $50,000 on behalf of MPS for first-year operations. Additional fundraising efforts are intended to launch in the spring through the city, in partnership with supporters including the Greater Milwaukee Foundation and United Way.
“In some ways, we really don’t look at this like a savings program because it is more than just a savings program,” said Sharon Robinson, director of the Department of Administration for the City of Milwaukee. “It’s really about planting seeds of hope in young people who might not have otherwise thought about higher education as a possibility and helping to make it a reality.”
The college saving plan idea was an action item in a City of Milwaukee economic plan called Growing Prosperity. Robinson was tasked with researching CSA programs and the feasibility of implementing a large-scale initiative in Milwaukee more than a year ago. She led a workgroup that researched states that have CSA programs operating, including California, Maine, Michigan and Mississippi.
For Milwaukee, the CSA will be led by a public-private partnership with Edvest, Wisconsin’s college savings plan, where a master account is opened and a program manager will be hired to track individual students who will have access to funds in the account.
If a student leaves MPS, the funds accumulated for that student will be recycled back into the program. If students stay in MPS and complete their K-12 education, they will have access to the funds upon enrollment in postsecondary education, with a possible five-year window for enrollment.
MPS has been implementing readi-
ness programs in recent years to help students get geared toward applying to postsecondary education. These include workshops designed to give students and families professional help in filing their Free Application for Federal Student Aid (FAFSA). MPS has opened College & Career Centers in four high schools and has expanded to all 20 of the district’s traditional high schools.
The rate of MPS grads enrolling in postsecondary education has been edging up — from 35% in 2011 to 43% in 2015.
Through their research, Robinson and the workgroup found that low- and moderate-income children are four times more likely to graduate if they have between $1 and $500 in savings for college. They are three times more likely to enroll in college.
These kinds of results, Robinson said, are needed to address educational disparities in Milwaukee where, according to research through Growing Prosperity, 46% of white students and 52% of Asian students had plans to go to college while only 37% of African-American students and 33% of Hispanic or Latino students held the same plans.
“Children from low-income backgrounds and, in particular, African-American youth, didn’t have the aspirations of their peers,” Robinson said of the research. “In some cases, when they were leaving high school, they had no plans whatsoever. … So it demonstrated a real need.”
Students are predicted to have a minimum of $500 in savings by the time they graduate, though there is a possibility of that amount increasing, depending on fundraising.
While students will start with $25 of seed money in their Edvest accounts, Robinson said that the workgroup and CSA partners are devising ways for students to earn “bonus deposits” throughout their education. These deposits can be earned through specific achievements by students and their families.
Kellie Sigh, a director in the Office of the Chief of Staff at MPS, said potential incentives tied to academics include ideas for improved reading scores, attendance and, for families, increasing financial literacy.
According to Robinson, the CSA program is geared toward helping parents as much as students in the long run.
“There is a connection between wealth building and economic mobility,” Robinson said. “We are actually hoping some of the parents will be motivated to pursue education beyond high school or to pursue postsecondary education if they haven’t done so.”
Sigh was one who attended two separate focus groups designed to gauge reactions from parents and provide a platform to answer possible questions.
“There were some parents who were cautiously optimistic,” Sigh said. “But, what I heard more often than anything was that they liked the idea.”
Along with the Edvest master fund for students, additional educational opportunities to help families build financial literacy and economic mobility are being discussed. Robinson said that quality makes the program a “two-generational approach.”
Students will be able to receive similar educational opportunities through a partnership with Mount Mary University in Milwaukee. Mount Mary President Christine Pharr said she hopes to send university students into schools to provide examples of how students of various backgrounds are able to afford postsecondary education.
“I have great hopes for it (CSA) to really transform lives,” Pharr said. “Education is the great equalizer in many cases. If we can get a larger percent of our students completing high school and advancing into some form of higher education, I think that will have a great effect on the community.”