Earlier this year, the federal government opened up applications for “Trump Accounts” or 530A accounts to children nationwide. With economic mobility increasingly out of reach for so many, efforts to allow more families to build wealth, particularly those who have historically been excluded, are essential. Creating a federal program that can achieve this requires intentional design choices. There are valuable lessons to be learned from New York City’s experience.
Over the past decade, New York City has developed a platform for universal, community-driven wealth building for every public school student, starting in kindergarten.
To date, the NYC Kids RISE Save for College Program, a public-private-community partnership launched with NYC Public Schools, the City of New York, and the Gray Foundation, has reached more than 380,000 children — nearly every public elementary school student. The program has accumulated nearly $80 million to support their college and career dreams.
We are proud of this progress and offer some insights from our efforts in building this program:
Universal & Automatic Enrollment: A qualifying child receives a 530A account only if their family proactively opts them in. Our program, by contrast, automatically enrolls every public school kindergartener, regardless of their citizenship or immigration status, unless their family opts out. Decades of empirical research have shown that defaults matter.
While 529 college savings accounts have been available for decades, 5-year-olds in NYC’s lowest-income neighborhoods were about 20 times less likely to have a NY 529 account than those in wealthier neighborhoods. A child in a low-income household with a college savings account of less than $500 is three times more likely to go to college and more than four times more likely to graduate than a child without an account.
A Platform for Community Engagement: Our program mobilizes families, schools, communities and partners to invest in children’s futures. Elementary schools are using the program to promote college and career readiness, bolster school-community ties, and advance financial education and empowerment. NYCHA Resident Associations and other civic groups are spreading the word to kids about what’s possible.
We have also created the Community Scholarship model, where government, businesses, philanthropy, community institutions, and New Yorkers can direct money into sets of students’ accounts. For example, NYC public school alumni contribute to Scholarship Accounts of the students at their elementary school alma maters, and businesses like Koeppel Auto Group contribute a portion of each sale to students in their neighborhood.
530A accounts have embraced this approach in part: philanthropists and companies have committed to contributing funds. The magic of Community Scholarships is more than the money. It is the ability to mobilize communities around children’s success. That comes from community partnership rooted in neighborhoods.
Progressive Wealth-Building: 530A accounts promise $1,000 for every U.S. citizen newborn who opts in over the next four years. In New York, City Council Speaker Julie Menin proposed a historic investment of $1,000 in every child’s NYC Scholarship Account, with $3,000 going to students with the greatest need. That kind of progressive targeting is a critical tool to closing wealth gaps.
As we continue to support children across the five boroughs in building wealth and achieving their dreams, we hope New York City’s example will inspire and inform the national early wealth-building infrastructure in a way that could be transformative for generations to come.
Glickstein is the founding executive director of NYC Kids RISE.