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Sowing accounts for preschoolers and hoping to grow graduates

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Mrs. Tiller felt unprepared after high school, struggled in community college, and eventually dropped out. “I know life is hard,” she said, “and I don’t want to see them struggle like I have to.”

Children’s savings accounts were invented 30 years ago by Michael Sherraden, founder from the Center for Social Development at Washington University in St. Louis, who suggested creating an account for all children at birth. Since 2007, he has been principal investigator in an experiment tracking 2,700 newborns in Oklahoma randomly assigned to two groups: half received a $1,000 bill at birth; the other got nothing. Many programs use the research of the center, which showed that the reports raise the expectations of both the parents and the child about the child’s future.

So far, the biggest beneficiaries of 529 accounts have been wealthier families who open them themselves. According to ISS Market Intelligence, a financial research and analysis firm, there were 14.3 million 529 accounts with a total of $437 billion in assets at the end of June.

But proponents believe that automatic account launches will change that and ultimately help narrow the wealth gap; New York’s so-called baby bond program is just one part of a wider economic justice initiative. In the pilot school district, certain Astoria students living in public housing already have more than $1,500 in their accounts, thanks in part to scholarships raised through the tenants’ association.

A similar effort helped Mrs. Hudson-Figueroa’s daughter, who is now in fourth grade, raise her balance to more than $500. The Woodside Houses Resident Association helped raise $35,800 — about $218 each — for first through with fourth graders at PS 151.

As chair of the school’s PTA, Ms. Hudson-Figueroa now assists other parents, answers questions, and guides them through the steps they need to take to maximize the savings they qualify for.

“The main question I usually get is, ‘What should I do?'” she said. “And the best part is that I can tell them, ‘Your child is already enrolled.'”

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