Many families delay saving for college and others simply cannot afford the extra expense. In either case, New York City announced a pilot program to kick-start college savings accounts, reports The New York Times.
The three-year pilot program, which targets kindergarteners from low-income families, launches in the fall. Under the administration of a new city agency, about 3,500 families will receive $100 to deposit into a 529 college savings account. The families could receive larger deposits over four years if they contribute small amounts of their own money consistently to the account.
Philanthropist Jon Gray is financing the initiative through a $10 million donation. Gray told The Times he might contribute additional funds if most of the families follow through.
“If we get a lot of take up, and we have a lot of families saving money, investing, opening up these 529 accounts, that to me and to us would be a sign of real success,” he told the newspaper.
New York is not the first city to encourage college saving among its low-income residents. San Francisco, Oakland and Boston launched similar programs. States like Maine and Oklahoma are also encouraging college saving.
SOURCE: New York Times