New York City elected officials are giving parents of kindergartners $1,000 to invest in their kids’ college education—an effort that is being greeted with a mix of optimism and skepticism from those trying to gauge the true value to families.
The money will be put into a college savings account, in the hope that its value will compound over time. Students can use it to enroll in any four-year college, community college, or vocational school.
The initiative is part of a larger $125.8 billion budget agreement between Mayor Zohran Mamdani and the City Council, announced last month.
The investment is an expansion of an existing program called NYC Kids RISE, which has given each student $100 when attending public school at the start of kindergarten.
Any public school student in the New York City schools—the nation’s largest, with nearly 900,000 enrolled—can qualify and will automatically be enrolled in the new program unless parents opt out.
Mamdani was voted into office last year on promises to address affordability on many fronts, from housing to the price of groceries.
This universal college savings program will be the largest of its kind in the nation, said NYC Council Speaker Julie Menin at a news conference last month. She also said that this program would help address income inequities between wealthy and poor households, by adding a new mechanism for families to invest.
“This is simply one of the most effective ways we can truly address income inequality,” Menin said.
If parents were to receive $1,000, which would compound over the next 12 years and without additional investments, some analysts calculate that by the time the student is enrolling in college, the funds would reach approximately $2,800.
New York City’s initiative works like the traditional 529 plan, where after the initial city investment, more funds could be added by families and returns increase over time.
However, some experts on college access are skeptical that the program will make a meaningful financial difference for families.
College is more expensive than ever before, and high costs have been a major concern at the state and national level. Postsecondary costs vary by location and type of institution. But nationwide, on average, the cost of tuition for a public, four-year, in-state school is around $12,000 per year, and for a private four-year institution, it stands at about $45,000, according to the College Board.
The New York City program certainly “won’t hurt,” said Timothy Knowles, president of the Carnegie Foundation for the Advancement of Teaching, an education policy and research center based in California.
But a "$1,000 deposit in an educational savings account won’t have a significant impact on income inequality,” he said.
“For families who struggle to make ends meet week to week, let alone save for something a decade away, it will not likely make postsecondary education more accessible.”
An earlier version of the NYC plan called for $3,000 per student
An initial proposal to support New York City families was more ambitious: It called for $3,000 for low-income families and $1,000 for non-low-income families, but that plan didn’t make it to the final version of the budget.
A better approach would have been to have tied the college investment more closely to family income level, Knowles argued. When the financial support is universal, he said it can dilute the resources for parents and other caregivers who need it the most.
A more helpful strategy would be to “invest more in families with greater need,” he said.
Removing barriers for families to send their kids to college requires much more than just financial support, others pointed out. Students also need an understanding of the right courses to take during elementary and secondary school, said Laura Perna, the senior vice provost for faculty at the graduate school of education at the University of Pennsylvania.
For example, first-generation students might need help filling out the Free Application for Federal Student Aid, or FAFSA form, since the 529 college savings account isn’t enough to cover all the costs of attending attend a university.
“Whether this is a large enough amount of money to address the financial costs is one part of it,” Perna said. “Certainly students also need other things to successfully enroll in college.”
A primary benefit: signaling the possibility of postsecondary access
But supporters of the New York program say its potential benefits go beyond the direct financial returns to students and families.
A spokesperson for Menin, the speaker of the New York City Council, said city officials recognize that there are broader challenges with financial access to college. The new program is simply meant to offer one, targeted form of assistance.
The initiative is “a very specific tool” that is “solving for a specific part of the problem,” the spokesperson said.
A lot of families, especially those that are impoverished, might not realize how expensive college can be. This program will help encourage them to "[invest] in it from day one,” said the spokesperson.
Perna agrees. The main value of the program “is really the signaling,” she said. It’s about “trying to communicate to students and their families at this early age that college is out there—and they should be thinking about it.”
Janice Bloom, co-executive director of College Access Research and Action, says the structure of the program will help it build a base of support in the city. Her organization works to address the barriers that first-generation and low-income students face when applying to college.
College access is a major concern among middle-income families, too, she said.
“Having them feel as though this is an entitlement for them, as well, [generates] a lot of political capital.”
Additionally, the scope of the program—awards of $1,000—will seem reasonable to much of the public in New York City, she predicts.
“If someone was saying ‘We’re giving $20,000 to every single kid,’ including students whose families don’t need it,” Bloom said, the reaction would be “That’s a big number.’ But this amount feels meaningful.”
