Buried in New York City’s latest budget is a rare initiative that rewards saving: a $1,000 college savings account for every kindergartener who enrolls in public or charter schools. The commitment expands NYC Kids RISE, a public-nonprofit collaboration championed by City Council Speaker Julie Menin, its founding board chair.
The program won’t solve K-12 public education’s deeper problems, nor can it substitute for stronger college preparation or high-quality technical and vocational training. But it can help cultivate responsibility, industry, and aspiration among children who might never imagine higher education as a real possibility.
NYC Kids RISE launched as a Queens pilot in 2017 to seed each kindergartener’s account with $100, funded by a $10 million gift from the Gray Foundation. It expanded citywide in 2021. Every kindergartner in NYC public and charter schools is now automatically enrolled unless their family opts out during a 30-day window. Each child’s “NYC Scholarship Account,” comes with $1,000, beginning this fall.
NYC Kids RISE owns and manages each account, investing the funds in a NY 529 plan, which offers parents state-tax deductions for contributions, tax-deferred growth, and tax-free withdrawals for qualified education expenses.
The program rewards families for activating the account, opening a savings account alongside it, and make deposits. The funds grow tax-free for 13 years and can be used at four-year colleges, community colleges, and vocational and trade programs.
Communities can pitch in through “Community Scholarships” funded by school alumni groups, local businesses, and congregations. Over the past three years, graduates of the city’s public schools have given more than a million dollars to the accounts of children sitting in the same classrooms they once did.
For many households, it will be the first investment account anyone in the family has owned. Even if only a modest share of students pursues an education they otherwise would not have, the gains in lifetime earnings, productivity, and tax revenue could easily exceed the program’s cost.
People with a bachelor’s degree earn a median of 75% more over a lifetime than those with only a high school diploma. A trade-school certificate carries a 20% wage premium.
The city spends more than $42,000 per student per year, the highest in the nation — roughly $546,000 over 13 years. The $1,000 seed money will cost an estimated $53 to $64 million annually against a $38 billion operating budget. Unlike spending on bloated operating expenses, students keep and compound these dollars.
The evidence comes from research on education savings accounts (ESAs), which 18 states — nearly all red — use to deliver public funds in parent-controlled accounts for K-12 education providers. Manhattan Institute’s Nicole Stelle Garnett notes that ESAs are popular among families and facilitate new school options. A randomized experiment in Oklahoma found even small accounts improved parents’ engagement and students’ hope for the future.
Kids RISE accounts have accumulated about $85 million. Most of that is the city’s seed money, program rewards, and investment growth, suggesting that policymakers should continue bolstering incentives for family participation, work with financial institutions to spread awareness, and publish data on student outcomes.
City leaders should expand Kids RISE next year to include private- and religious-school students. Means testing would also target funds to needy families that struggle to matriculate to higher or professional education.
Kids RISE won’t fix the city’s schools, but it offers children and families something of value: a growing stake in their future.
Ketcham and Weber are Manhattan Institute fellows.