529 accounts allow college savings for children (photo: Michael Appleton/Mayoral Photography Office)
In the face of profound economic hardship and uncertainty, families and school communities across one of the most diverse and hardest-hit areas of our city are coming together today in recognition of their collective work to build a financial foundation for their children’s futures.
Today, May 29th, is 529 Day.
529 Day, named after 529 college savings plans, which are investment accounts specifically designed for college and career savings, is an annual opportunity to build community around preparing for college and career training. This year’s 529 Day comes as New York City’s communities — particularly its low-income communities, communities of color, and immigrant communities — are bearing the brunt of a public health and economic crisis like nothing we have seen in our lifetimes.
School District 30 in Western Queens, which spans an area from Long Island City and Astoria across to East Elmhurst, Jackson Heights, and part of Corona, is at the epicenter of the epicenter of these compounding crises. Tragically, these are the same families and communities that are among the least likely to benefit from the federal stimulus programs passed to date.
And yet this community is joining together, virtually, to mark the fact that more than 10,000 of their kindergarten, first-grade, and second-grade students already have a financial asset set aside for their educational future through the NYC Kids RISE Save for College Program, a public-private-community partnership initiative run by the nonprofit NYC Kids RISE.
Research has shown that a child in a low-income household with a college savings account of just $1 to $500 is three times more likely to go to college and more than four times more likely to graduate than a child without an account. 529 plans are the country’s main college and career savings tool, providing access to investment earnings alongside federal and state tax breaks. In practice, however, the benefits of 529 plans have overwhelmingly accrued to families toward the top of the income ladder. In 2014, just one out of every 91 children in the lowest-income New York City neighborhoods had a NY 529 account, compared to one out of four children in the highest-income neighborhoods.
Today, about 95% of K-2 students across this diverse school district have a 529 account with money set aside for their future. Over the past three years, 39 district and charter elementary schools, thousands of families, community leaders and partners, city government agencies, and state government offices have worked together through the Save for College Program to build financial assets and promote college- and career-going expectations for every participating student, regardless of immigration status or income. To date, this community has collectively deposited more than $3.3 million toward these young students’ educational futures through contributions from local organizations and businesses, philanthropy, and families’ own savings.
To mark 529 Day 2020, we have joined the schools and families of District 30 for virtual financial education lessons, a virtual town hall on balancing immediate financial needs with long-term financial goals, and a social media conversation using the hashtags #Together529 and #Juntos529. It is a reminder that, despite the immediate crisis, District 30’s students will continue to have options for their future because of the work their families and communities are doing today to prepare. In a moment of darkness, our children’s dreams and possibilities continue to shine bright.
Still, there is so much more to be done. The COVID-19 crisis threatens to widen existing income and wealth gaps in our city, further fray families’ already dwindling safety nets, and harm the long-term educational and economic trajectories of New York City’s children.
To ensure a full and equitable recovery, we need to invest more deeply in the financial security of every family, particularly those who are already most economically vulnerable. We need to continue to find ways to progressively drive assets toward communities of color and immigrant communities — regardless of immigration status — to both help provide a cushion in times of crisis and equip these families to succeed in the long-term. Indeed, initiatives that bring neighborhoods together to build financial resources and resiliency for every family must be a core component of the response to this crisis.
If we know anything, it’s that none of us got here, or go anywhere, on our own. More than ever, we owe it to one another to make sure all of our kids have a real financial asset waiting for them for their future. We hope you will join us in celebration of that vision on 529 Day.
Debra-Ellen Glickstein is the executive director of NYC Kids RISE. Lorelei Salas is the commissioner of the NYC Department of Consumer and Worker Protection (DCWP), which houses the City’s Office of Financial Empowerment, and an ex-officio director of NYC Kids RISE. On Twitter @GlicksteinDebra, @LoreleiNYCDCA, & @NYCKidsRISE. Join the conversation by posting on social media using #Together529 & #Juntos529.