Gavin Newsom promised college savings accounts for kindergarteners. He’s taken a $50 million step
The cost of going to college in California has grown dramatically.
Take tuition and fees at the University of California. Today's undergraduates pay $14,400, or six times what students did four decades ago, when adjusted for inflation, according to the nonprofit California Budget & Policy Center. Those costs have increased at an even faster clip at the California State University system.
In addition, today's students are experiencing higher housing costs, leaving some homeless.
During his campaign for governor, Gavin Newsom promised to address the problem, in part by creating a "financial foundation for college beginning in kindergarten."
"Gavin understands that we need to create a college-going culture beginning in elementary school," his campaign website stated. "As Governor, he will launch college savings accounts for every incoming kindergartener, putting higher education within reach. This foundation will help families plan a bright future for their child."
We wanted to know what progress, if any, Newsom has made on the promise.
We found he has taken a key step forward.
Newsom's first budget includes $50 million to expand savings account programs. Here's how the budget divides up the new money:
• California Kids Investment and Development Savings Program—$25 million one-time General Fund to support college savings accounts at the ScholarShare Investment Board for eligible low-income California children born on or after July 1, 2020.
The money would pay to establish ScholarShare accounts that families could then contribute to. The board runs California's 529-college investment program, which allows residents to save for college by placing money in tax-advantaged funds.
• Child Savings Account Grant Program—$25 million one-time General Fund to support grants to local governments and nonprofit organizations that sponsor or create local or regional child savings account programs, according to the budget.
The state's Student Aid Commission will run the program. It will offer savings accounts to students at schools in lower-income neighborhoods, serve children up to age 10 and invest a minimum of $100 to open each account.
Asm. Kevin McCarty, D-Sacramento, an advocate for early childhood education funding, said the new money builds on a $3 million fund created two years ago under former Gov. Jerry Brown for the same goal.
He cited two examples, Sacramento and West Sacramento, where schools already receive grant money for their kindergarten to college savings programs.
"Any family that has a savings account with a kid's name on it is about eight times more likely to go to college." McCarty said. "We think it will really help with the culture for higher education and make a difference for families across California."
This is not Newsom's first experience with child savings accounts. In San Francisco, every public school student automatically receives a $50 college savings account through a program established during Newsom's second term as mayor.
During his run for governor, Gavin Newsom promised to launch college savings accounts for every incoming kindergartener.
He's taken a key step forward by including $50 million for that purpose in his first budget. The money would pay for potentially thousands of accounts for students.
This promise is far from complete. We'll track Newsom's progress to see how many accounts are actually created and whether his administration continues to fund the savings account programs.
For now, we rate it "In the Works."
In the Works — This indicates the promise has been proposed or is being considered.
Track Gov. Gavin Newsom's progress, or lack thereof, on his campaign promises on our Newsom-Meter page.
Gavin Newsom for Governor 2018 website, accessed July 2019
Brian Ferguson, spokesman for Gov. Newsom, email exchange, July 11, 2019
California enacted budget, early childhood, accessed July 2019
Asm. Kevin McCarty, phone interview June 14, 2019
Patricia Lozano, executive director, Early Edge, phone interview June 14, 2019
California Budget & Policy Center, The Cost of College, Then and Now, April 30, 2019
San Francisco Chronicle, Newsom wants to expand programs that open a savings account for every kid, Feb. 23, 2019
Sacramento Bee, California budget spends $280 million to make college more affordable, from savings to grants, July 1, 2019