For Case DeBoer and his family, saving for college has already started with a $50 community investment in his post-secondary education.
Perhaps the 7-year-old McFall Elementary first-grader will pursue an automotive technology degree to become the race-car driver that currently tops his career list.
With the Kickstart to Career savings account from Barry Community Foundation, saving for college isn’t just a family financial decision — it’s a community obligation.
Since 2015, every district kindergartner is automatically enrolled in the Barry County program. It’s a long-term, deposit-only savings account that can only be used for post-secondary education and training.
Parents don’t need to opt in, but opt out, said Annie Halle, the foundation’s Vice President of Operations. With a child’s name and student ID number, the account is opened without a parent signature or the kindergartner’s social security number.
“We did that to make sure that we captured the most vulnerable populations,” Halle said. “For many, it’s their first bank account.”
With the program now in its third year, another 730 kindergarteners were added to receive an initial $50 deposit in January. The total so far comes to 2,200 students enrolled.
“It’s so generous and so thoughtful that we have a community that is thinking of our families and kids, and setting aside a very large amount, as a whole, for our kids,” said Case’s mom, Kristy DeBoer, who was delighted when $5 was added to his Kickstart to Career savings account for participating in the summer reading program at Freeport District Library.
That’s just one of the ways students are eligible to receive additional money in their accounts.
“For that first calendar year, we’ll match the first five deposits with an additional $5, so there’s the potential to earn an additional$25,” said Amy Murphy, foundation director. The match is funded by the Richard and Merilyn Foster Memorial Fund.
“If a student deposits one quarter, they’ll net $5 for a total deposit of $5.25,” Murphy said. “It might not sound like a lot of money, but it can make a good impression (on the student that) things are happening. They can see the value in savings.”
Families are encouraged to fill out the parent account contact form to manage to their child’s savings and make deposits – including setting up recurring deposits. The accounts are set up like a long-term (21-year) certificate of deposit, which becomes payable on high school graduation when funds are requested from the foundation. There are no fees associated with the Kickstart to Career accounts.
When the child enrolls in higher education, the savings and accrued earnings can be withdrawn for qualified educational expenses including tuition, books, or any other cost of attending school.
For those who do not pursue a post-secondary degree or certification, private dollars the student saved in the account will be returned, and the public dollars go back into Kickstart to Career funding.
Creating a College-bound Identity
Nancy Goodin, assistant vice president and marketing director at Hastings City Bank, visits every kindergarten classroom and gives a financial literacy lesson developed with county superintendents and curriculum directors.
The Kickstart to Career savings account is another way to get families in touch with banking institutions, Goodin said.
“One of the questions that I ask (when going into classrooms) is: how many of you have savings accounts and maybe a third or so will raise their hands,” Goodin said. “My message that then follows is that this is a special savings account just for your college education. After you graduate high school, this belongs to you for the sole purpose of continuing your post-secondary education – this is yours to use for that opportunity.”
Studies have shown that students with as little as $500 in college savings are three times as more likely to enroll in college and four times as more likely to graduate than those without a savings account, Goodin said.
“It’s that mindset; it’s that college-bound identity. When students know that there is a college expectation, then that is what they strive for. One of the best things about this program is that these funds can be used for any qualified education expense after high school, including, trade schools, certification programs, or two and four year colleges and universities.”
Helping All Students Succeed
Like Johnny Appleseed, the Kickstart to Career partners are crisscrossing the nation to spread the word about the initiative, including the child savings account conference in Chicago, preparing for the family economic security task force in San Francisco, and now organizing their own symposium for later this year.
So far, both Muskegon and Fremont Community Foundations have announced plans to launch KickStart to Career child savings accounts in 2018 – modeled after the Barry Community Foundation’s program. Many other community foundations throughout the country are getting on board with CSA programs, Goodin said.
“We have had inquiries from banks and foundations from all over the nation, and we want to enlist other financial partners to do something like this,” Goodin said.