JUDY WOODRUFF: As we discussed
with Senator Bernie Sanders,
college debt is a huge problem
in our country.
Roughly two-thirds of
students finish school
owing nearly $30,000.
Sanders is not alone in his
call for free public college.
Many of the 2020 presidential
candidates have started
laying out their own plans.
As those ideas take shape, a
number of states and cities
are creating their own plans to
provide grants and money
for the very youngest
to ensure that they can
eventually go to college.
Hari Sreenivasan has the story
for tonight's Making the Grade.
And it's part of a special
series on Tuesdays this month
about Rethinking College.
HARI SREENIVASAN: Just days'
old, this newborn has already
started saving for college.
Under a new Pennsylvania
program, every baby
born or adopted in the
state is given a college
savings account with
$100 in his or her name.
JOE TORSELLA, Pennsylvania
State Treasurer: That $100 is
invested in our 529 account,
and will grow over time.
HARI SREENIVASAN: So
140,000 kids a year are
born in Pennsylvania?
JOE TORSELLA: Yes.
HARI SREENIVASAN: The
accounts are the brainchild
of Pennsylvania State
Treasurer Joe Torsella.
The new program, called
Keystone Scholars, is an effort
to help future students cope
with skyrocketing
costs of college.
JOE TORSELLA: Over roughly 30
years, the cost of higher ed has
gone up in this country around
300 percent, while the
median family income has
basically not budged .
HARI SREENIVASAN: According
to the Federal Reserve Bank of
New York, Americans owe $1.46
trillion in student debt.
Treasurer Torsella says
Pennsylvania student debt burden
is particularly troubling.
JOE TORSELLA: I love my state.
I'm a proud Pennsylvania.
And I love it when I can say
we're number one, except when
the thing we're number one
in is college debt.
We currently lead
the nation in that.
Our average graduate
has about $36,000.
HARI SREENIVASAN: Born January
18, Charlie Ross (ph) was one
of the first babies to benefit
from the statewide program.
Kristin Dressler
is Charlie's mom.
KRISTIN DRESSLER, Mother: It
was something I wish my parents
had done for me when I was,
like, a baby.
And I think it's a
really good idea.
HARI SREENIVASAN: Pennsylvania
is betting that parents
will be less likely to delay
saving for college if
accounts are automatically
created at birth.
JOE TORSELLA: There is a
time when a child is born you
always remember for the sense
of magic and possibility.
Life quickly takes over,
with all kinds of demands.
We wanted to do something
at that moment when
people are looking at
their newborn or their
newly adopted child, and
they had the widest horizon
and the widest sense
of those possibilities.
HARI SREENIVASAN: Dressler
took out a loan to pay for
her first two years of college
and will take out more
to complete her degree.
She wants an easier path
for her son's education.
KRISTIN DRESSLER: I'm
hoping that he doesn't
have to worry about that.
HARI SREENIVASAN: But
if the average debt
load in Pennsylvania
for college graduates
is $33,000, can $100
really make a difference?
JOE TORSELLA: That
$100 grows to $400.
And if they deposit $25 a month
from the time that child's born
in an account with it, they
will have more than $10,000 by
that time that child reaches 18.
HARI SREENIVASAN: Pennsylvania's
new accounts are funded through
surplus earnings from the
state's existing
529 college program.
Like all 529 accounts, the money
is earmarked for education.
If an individual wants to use
the funds for other purposes,
they face tax consequences,
and any money the state
contributed is returned
to a general fund.
Pennsylvania is not alone.
Plans to help families save
for college are popping
up across the country.
In San Francisco, every child
when they enter public school
gets a new bank account with
$50 in it.
So far, they have opened
more than 33,000 accounts in
their kindergarten-to-college
program.
JOYCE MELOCOTON, Teacher:
Are you guys excited
for your field trip?
STUDENTS: Yes!
JOYCE MELOCOTON: Where
are we going again?
STUDENTS: The bank.
HARI SREENIVASAN: At
San Francisco's William
Cobb Elementary School,
teacher Joyce Melocoton
prepares her kindergarten class
for a field trip to the bank.
JOYCE MELOCOTON: We're going
to the bank because you have
to deposit money for what?
STUDENTS: College.
JOYCE MELOCOTON: College.
OK.
And if you start saving
now, then you will
be ready for college.
HARI SREENIVASAN: On
this day, kindergarten
students were joined by
San Francisco Treasurer
Jose Cisneros at Citibank,
a partner in the program.
JOSE CISNEROS, San
Francisco Treasurer: We
put $50 in your account.
You already have money saved
for your college education.
HARI SREENIVASAN: Fifty dollars
is not much, but Treasurer
Cisneros says creating an early
perception about going to
college is just as important
as creating actual wealth.
JOSE CISNEROS: What matters
less is how much money is in
the account and -- or what the
income of the family is.
It's all about building
aspirations in the
student's mind and making
sure they know this
is an option that is
available for them.
STUDENT: I would like
to make a deposit.
JOSE CISNEROS: To my
college savings account.
STUDENT: To my college
savings account.
JOSE CISNEROS: You need
to give her the money
and the deposit ticket.
HARI SREENIVASAN: Half of
San Francisco's public school
students come from low-income
families.
And while all students receive
an account, Cisneros hopes to
engage families less likely
to attend college.
JOSE CISNEROS: Just engaging
with that account, going to the
bank, making deposits, talking
about it at home, maybe talking
about it with friends, sends a
signal that says, oh, I have
got a college savings account.
Why?
Because I'm going to college.
And for many kids who don't
have that in their childhood,
that kind of conversation, that
kind of influence, it turns
out not being something they
think is available to them.
HARI SREENIVASAN: But so
far, only 20 percent of
families in San Francisco
have made additional
deposits in their child's
kindergarten-to-college
accounts.
Professor Brigitte Madrian is
an expert on family savings
and the dean of Brigham Young
University Marriott
School of Business.
BRIGITTE MADRIAN, Dean, Brigham
Young University Marriott School
of Business: Parents who are
actually contributing money is
pretty low, so it's going to
take more than just automatic.
HARI SREENIVASAN: Madrian says
automatic savings accounts, set
up for things like retirement,
have been hugely successful
when tied to payroll deductions.
But she's less confident that
automatic college accounts will
be work when families are asked
to make contributions
on their own.
BRIGITTE MADRIAN: Households
have a lot of things for which
they probably should be saving,
and short-term financial needs
may be taking precedence over
longer-term needs, like saving
for your children's college.
MAN: Can anybody say
safe deposit box?
HARI SREENIVASAN: The annual
cost of San Francisco's
program is three quarters
of a million dollars.
BRIGITTE MADRIAN: Is it more
cost-effective to direct those
same financial resources that
are coming from government to
early kindergarten readiness
programs, smaller class sizes in
K-12?
Which one gives you more
bang for the buck I think is
still a very open question.
HARI SREENIVASAN: As
for the William Cobb
Elementary students,
the most popular future
career cited on this
field trip, superhero.
WOMAN: So what do you want
to be when you grow up?
STUDENT: A superhero.
HARI SREENIVASAN: Six-year-old
Xavier Ochoa said he wants to
be Batman when he grows up,
but he also got the
message of the day.
JOSE CISNEROS: I would
like to make a deposit.
XAVIER OCHOA, Student: I
would like to make a deposit.
JOSE CISNEROS: In my
college savings account.
XAVIER OCHOA: In my
college savings account.
JOSE CISNEROS:
Here's your receipt.
OK.
Say thank you.
XAVIER OCHOA: Thank you.
I want to get money for college,
so I can learn more things,
and so you can learn when
you want to grow up.
HARI SREENIVASAN: For the "PBS
NewsHour," I'm Hari Sreenivasan.