American families are forced to start counting dollars instead of sheep while trying to ensure a stable future for the next generation. As the United States progresses toward a competitive work society, your financial standing becomes less dependent on how many hours you put in at work and more dependent on the circumstances you’re born into. One of the causes of this uneven playing field is that wealthier households have the means to open savings accounts and trusts for their newborn children that will eventually serve as a source to fund college tuition.
To combat these inequitable circumstances, Massachusetts State Treasurer Deborah B. Goldberg created Massachusetts’ first statewide college savings account program, dubbed the SeedMA Baby Program, which will begin Jan. 1, 2020.
Boston Mayor Martin J. Walsh, BC ’09, piloted his own program, Boston Saves, in 2016, providing savings accounts to every kindergarten student in 11 public elementary schools in Boston. Funded by the National League of Cities, a $50 seed deposit was put into each of these savings accounts.
Boston Saves provided approximately 1,600 students with new savings accounts that were seeded with the automatic deposit. This fall, the program went city-wide and expanded from supporting 11 to 80 different schools in Boston. This year, enrollment in Boston Saves reached peak enrollment, with 4,000 new accounts to opened for students.
Starting Jan. 1, the agreement for a free deposit of $50 into a 529 account will expand beyond just local kindergarteners and across the state of Massachusetts with SeedMA Baby. With the program, any child born or adopted as a Massachusetts resident after the start of 2020 is eligible for the opening of a savings account by the state along with a $50 deposit.
Programs such as SEEDMA Baby could work to close the gap between those born into more financially stable homes and those born into any form of financial need.
Walsh expressed his excitement about SEEDMA in a press release.
“College savings accounts are tools that every family should have,” Walsh said. “They are key to leveling the playing field for students of all backgrounds and they are vital to making post secondary education both a dream and a reality. I’m thrilled that through SeedMA Baby, families will find it easier to build a future of higher education for their children.”
Programs such as SeedMA Baby and Boston Saves are vital to prepare Americans financially for higher education and could encourage students to apply for college when they might not otherwise.
One study by the Center for Social Development shows that knowledge of cumulative savings for the purpose of higher education can motivate lower-income students to enroll in college after high school.
Seventy-five percent of the jobs in the American market require a college degree, according to a report by Georgetown University. With a college degree necessary to financial success and a job, starting students out with a savings account sets them up for success in the future.
Further, programs such as SeedMA Baby and Boston Saves will help students manage debt following college by allowing them to begin saving for a college education far before they step foot on campus. Students leave Massachusetts state universities with an average of $35,000 in debt, according to the Boston Business Journal. SeeDMA Baby will alleviate students from some of the stress that comes with this debt. When faced with financial obstacles, students will be better prepared to handle them after managing a savings account alongside their parents.
Financial programs like SeedMA Baby and Boston Saves should be implemented in states across the country. Providing students with a start for financing their higher education has the potential to be a staple of support from the state. When money is not an obstacle, students can feel more open to doing something they love as a career, leading to a sense of belonging and a truer sense of happiness. After all, we have the right to life, liberty and the pursuit of happiness, so why should the workplace or school be any exception?