WEBVTT 00:02.066 --> 00:04.600 align:left position:10% line:77% size:80% JUDY WOODRUFF: As we discussed with Senator Bernie Sanders, college debt is a huge problem 00:04.600 --> 00:06.333 align:left position:30% line:89% size:60% in our country. 00:06.333 --> 00:10.633 align:left position:20% line:77% size:70% Roughly two-thirds of students finish school owing nearly $30,000. 00:12.066 --> 00:14.666 align:left position:10% line:83% size:80% Sanders is not alone in his call for free public college. 00:14.666 --> 00:19.600 align:left position:10% line:77% size:80% Many of the 2020 presidential candidates have started laying out their own plans. 00:19.600 --> 00:24.600 align:left position:10% line:77% size:80% As those ideas take shape, a number of states and cities are creating their own plans to 00:27.133 --> 00:30.100 align:left position:10% line:71% size:80% provide grants and money for the very youngest to ensure that they can eventually go to college. 00:31.533 --> 00:34.866 align:left position:10% line:83% size:80% Hari Sreenivasan has the story for tonight's Making the Grade. 00:34.866 --> 00:39.766 align:left position:10% line:77% size:80% And it's part of a special series on Tuesdays this month about Rethinking College. 00:39.766 --> 00:44.733 align:left position:10% line:77% size:80% HARI SREENIVASAN: Just days' old, this newborn has already started saving for college. 00:46.800 --> 00:50.600 align:left position:20% line:71% size:70% Under a new Pennsylvania program, every baby born or adopted in the state is given a college 00:51.766 --> 00:54.733 align:left position:20% line:83% size:70% savings account with $100 in his or her name. 00:54.733 --> 00:57.433 align:left position:10% line:77% size:80% JOE TORSELLA, Pennsylvania State Treasurer: That $100 is invested in our 529 account, 00:57.433 --> 00:59.100 align:left position:20% line:89% size:70% and will grow over time. 00:59.100 --> 01:02.766 align:left position:20% line:77% size:70% HARI SREENIVASAN: So 140,000 kids a year are born in Pennsylvania? 01:02.766 --> 01:05.233 align:left position:20% line:89% size:70% JOE TORSELLA: Yes. 01:05.233 --> 01:07.733 align:left position:10% line:71% size:80% HARI SREENIVASAN: The accounts are the brainchild of Pennsylvania State Treasurer Joe Torsella. 01:07.733 --> 01:12.233 align:left position:10% line:77% size:80% The new program, called Keystone Scholars, is an effort to help future students cope 01:12.233 --> 01:14.300 align:left position:20% line:83% size:70% with skyrocketing costs of college. 01:14.300 --> 01:18.800 align:left position:10% line:77% size:80% JOE TORSELLA: Over roughly 30 years, the cost of higher ed has gone up in this country around 01:18.800 --> 01:22.866 align:left position:20% line:77% size:70% 300 percent, while the median family income has basically not budged . 01:22.866 --> 01:27.866 align:left position:10% line:77% size:80% HARI SREENIVASAN: According to the Federal Reserve Bank of New York, Americans owe $1.46 01:28.733 --> 01:30.833 align:left position:10% line:89% size:80% trillion in student debt. 01:30.833 --> 01:34.733 align:left position:10% line:77% size:80% Treasurer Torsella says Pennsylvania student debt burden is particularly troubling. 01:34.733 --> 01:35.900 align:left position:10% line:89% size:80% JOE TORSELLA: I love my state. 01:35.900 --> 01:37.933 align:left position:10% line:89% size:80% I'm a proud Pennsylvania. 01:37.933 --> 01:40.400 align:left position:10% line:77% size:80% And I love it when I can say we're number one, except when the thing we're number one 01:40.400 --> 01:42.700 align:left position:20% line:89% size:70% in is college debt. 01:42.700 --> 01:44.266 align:left position:20% line:83% size:70% We currently lead the nation in that. 01:44.266 --> 01:47.266 align:left position:20% line:83% size:70% Our average graduate has about $36,000. 01:47.266 --> 01:52.233 align:left position:10% line:77% size:80% HARI SREENIVASAN: Born January 18, Charlie Ross (ph) was one of the first babies to benefit 01:53.133 --> 01:55.066 align:left position:10% line:89% size:80% from the statewide program. 01:55.066 --> 01:57.100 align:left position:20% line:83% size:70% Kristin Dressler is Charlie's mom. 01:57.100 --> 01:59.333 align:left position:10% line:77% size:80% KRISTIN DRESSLER, Mother: It was something I wish my parents had done for me when I was, 01:59.333 --> 02:00.666 align:left position:30% line:89% size:60% like, a baby. 02:00.666 --> 02:02.666 align:left position:20% line:83% size:70% And I think it's a really good idea. 02:02.666 --> 02:05.200 align:left position:10% line:77% size:80% HARI SREENIVASAN: Pennsylvania is betting that parents will be less likely to delay 02:05.200 --> 02:09.100 align:left position:10% line:77% size:80% saving for college if accounts are automatically created at birth. 02:09.100 --> 02:12.900 align:left position:10% line:77% size:80% JOE TORSELLA: There is a time when a child is born you always remember for the sense 02:12.900 --> 02:15.000 align:left position:10% line:89% size:80% of magic and possibility. 02:15.000 --> 02:17.766 align:left position:10% line:83% size:80% Life quickly takes over, with all kinds of demands. 02:17.766 --> 02:22.766 align:left position:10% line:71% size:80% We wanted to do something at that moment when people are looking at their newborn or their 02:25.166 --> 02:28.700 align:left position:10% line:71% size:80% newly adopted child, and they had the widest horizon and the widest sense of those possibilities. 02:30.633 --> 02:33.366 align:left position:10% line:77% size:80% HARI SREENIVASAN: Dressler took out a loan to pay for her first two years of college 02:33.366 --> 02:36.400 align:left position:20% line:83% size:70% and will take out more to complete her degree. 02:36.400 --> 02:38.533 align:left position:20% line:83% size:70% She wants an easier path for her son's education. 02:38.533 --> 02:41.833 align:left position:10% line:77% size:80% KRISTIN DRESSLER: I'm hoping that he doesn't have to worry about that. 02:41.833 --> 02:45.366 align:left position:20% line:71% size:70% HARI SREENIVASAN: But if the average debt load in Pennsylvania for college graduates 02:45.366 --> 02:49.566 align:left position:10% line:83% size:80% is $33,000, can $100 really make a difference? 02:49.566 --> 02:51.666 align:left position:20% line:83% size:70% JOE TORSELLA: That $100 grows to $400. 02:51.666 --> 02:56.466 align:left position:10% line:77% size:80% And if they deposit $25 a month from the time that child's born in an account with it, they 02:57.933 --> 03:01.366 align:left position:10% line:83% size:80% will have more than $10,000 by that time that child reaches 18. 03:01.366 --> 03:06.366 align:left position:10% line:77% size:80% HARI SREENIVASAN: Pennsylvania's new accounts are funded through surplus earnings from the 03:07.500 --> 03:11.533 align:left position:20% line:83% size:70% state's existing 529 college program. 03:12.933 --> 03:15.100 align:left position:10% line:83% size:80% Like all 529 accounts, the money is earmarked for education. 03:15.100 --> 03:20.100 align:left position:10% line:77% size:80% If an individual wants to use the funds for other purposes, they face tax consequences, 03:21.666 --> 03:25.700 align:left position:20% line:77% size:70% and any money the state contributed is returned to a general fund. 03:25.700 --> 03:27.666 align:left position:10% line:89% size:80% Pennsylvania is not alone. 03:27.666 --> 03:30.700 align:left position:10% line:77% size:80% Plans to help families save for college are popping up across the country. 03:30.700 --> 03:35.233 align:left position:10% line:77% size:80% In San Francisco, every child when they enter public school gets a new bank account with 03:35.233 --> 03:37.233 align:left position:30% line:89% size:60% $50 in it. 03:37.233 --> 03:41.433 align:left position:10% line:77% size:80% So far, they have opened more than 33,000 accounts in their kindergarten-to-college 03:41.433 --> 03:43.366 align:left position:40% line:89% size:50% program. 03:43.366 --> 03:44.266 align:left position:10% line:77% size:80% JOYCE MELOCOTON, Teacher: Are you guys excited for your field trip? 03:44.266 --> 03:45.500 align:left position:30% line:89% size:60% STUDENTS: Yes! 03:45.500 --> 03:46.666 align:left position:20% line:83% size:70% JOYCE MELOCOTON: Where are we going again? 03:46.666 --> 03:48.800 align:left position:20% line:89% size:70% STUDENTS: The bank. 03:48.800 --> 03:51.833 align:left position:20% line:71% size:70% HARI SREENIVASAN: At San Francisco's William Cobb Elementary School, teacher Joyce Melocoton 03:51.833 --> 03:54.766 align:left position:10% line:83% size:80% prepares her kindergarten class for a field trip to the bank. 03:54.766 --> 03:59.500 align:left position:10% line:77% size:80% JOYCE MELOCOTON: We're going to the bank because you have to deposit money for what? 03:59.500 --> 04:00.500 align:left position:20% line:89% size:70% STUDENTS: College. 04:00.500 --> 04:01.900 align:left position:10% line:89% size:80% JOYCE MELOCOTON: College. 04:01.900 --> 04:03.500 align:left position:40% line:89% size:50% OK. 04:03.500 --> 04:06.200 align:left position:20% line:77% size:70% And if you start saving now, then you will be ready for college. 04:06.200 --> 04:10.666 align:left position:20% line:71% size:70% HARI SREENIVASAN: On this day, kindergarten students were joined by San Francisco Treasurer 04:10.666 --> 04:13.733 align:left position:10% line:83% size:80% Jose Cisneros at Citibank, a partner in the program. 04:13.733 --> 04:16.900 align:left position:20% line:77% size:70% JOSE CISNEROS, San Francisco Treasurer: We put $50 in your account. 04:16.900 --> 04:20.266 align:left position:10% line:83% size:80% You already have money saved for your college education. 04:20.266 --> 04:24.500 align:left position:10% line:77% size:80% HARI SREENIVASAN: Fifty dollars is not much, but Treasurer Cisneros says creating an early 04:24.500 --> 04:29.433 align:left position:10% line:77% size:80% perception about going to college is just as important as creating actual wealth. 04:29.433 --> 04:34.433 align:left position:10% line:77% size:80% JOSE CISNEROS: What matters less is how much money is in the account and -- or what the 04:35.166 --> 04:37.633 align:left position:20% line:89% size:70% income of the family is. 04:37.633 --> 04:41.333 align:left position:10% line:71% size:80% It's all about building aspirations in the student's mind and making sure they know this 04:41.333 --> 04:43.433 align:left position:20% line:83% size:70% is an option that is available for them. 04:43.433 --> 04:45.433 align:left position:20% line:83% size:70% STUDENT: I would like to make a deposit. 04:45.433 --> 04:46.733 align:left position:20% line:83% size:70% JOSE CISNEROS: To my college savings account. 04:46.733 --> 04:48.433 align:left position:20% line:83% size:70% STUDENT: To my college savings account. 04:48.433 --> 04:51.233 align:left position:20% line:77% size:70% JOSE CISNEROS: You need to give her the money and the deposit ticket. 04:51.233 --> 04:55.033 align:left position:10% line:77% size:80% HARI SREENIVASAN: Half of San Francisco's public school students come from low-income 04:55.033 --> 04:57.133 align:left position:30% line:89% size:60% families. 04:57.133 --> 05:00.500 align:left position:10% line:77% size:80% And while all students receive an account, Cisneros hopes to engage families less likely 05:00.500 --> 05:02.533 align:left position:20% line:89% size:70% to attend college. 05:02.533 --> 05:06.033 align:left position:10% line:77% size:80% JOSE CISNEROS: Just engaging with that account, going to the bank, making deposits, talking 05:06.033 --> 05:11.033 align:left position:10% line:77% size:80% about it at home, maybe talking about it with friends, sends a signal that says, oh, I have 05:12.700 --> 05:14.500 align:left position:10% line:89% size:80% got a college savings account. 05:14.500 --> 05:15.500 align:left position:40% line:89% size:50% Why? 05:15.500 --> 05:17.533 align:left position:10% line:89% size:80% Because I'm going to college. 05:17.533 --> 05:22.266 align:left position:10% line:77% size:80% And for many kids who don't have that in their childhood, that kind of conversation, that 05:24.333 --> 05:28.433 align:left position:10% line:77% size:80% kind of influence, it turns out not being something they think is available to them. 05:30.933 --> 05:33.633 align:left position:10% line:71% size:80% HARI SREENIVASAN: But so far, only 20 percent of families in San Francisco have made additional 05:35.400 --> 05:38.600 align:left position:10% line:77% size:80% deposits in their child's kindergarten-to-college accounts. 05:38.600 --> 05:42.900 align:left position:10% line:77% size:80% Professor Brigitte Madrian is an expert on family savings and the dean of Brigham Young 05:42.900 --> 05:44.966 align:left position:20% line:83% size:70% University Marriott School of Business. 05:44.966 --> 05:47.066 align:left position:10% line:77% size:80% BRIGITTE MADRIAN, Dean, Brigham Young University Marriott School of Business: Parents who are 05:47.066 --> 05:49.933 align:left position:10% line:77% size:80% actually contributing money is pretty low, so it's going to take more than just automatic. 05:51.933 --> 05:55.533 align:left position:10% line:77% size:80% HARI SREENIVASAN: Madrian says automatic savings accounts, set up for things like retirement, 05:57.433 --> 06:01.566 align:left position:10% line:83% size:80% have been hugely successful when tied to payroll deductions. 06:01.566 --> 06:06.066 align:left position:10% line:77% size:80% But she's less confident that automatic college accounts will be work when families are asked 06:06.066 --> 06:08.100 align:left position:20% line:83% size:70% to make contributions on their own. 06:08.100 --> 06:12.833 align:left position:10% line:77% size:80% BRIGITTE MADRIAN: Households have a lot of things for which they probably should be saving, 06:14.900 --> 06:18.833 align:left position:10% line:77% size:80% and short-term financial needs may be taking precedence over longer-term needs, like saving 06:21.366 --> 06:22.600 align:left position:10% line:89% size:80% for your children's college. 06:22.600 --> 06:25.133 align:left position:20% line:83% size:70% MAN: Can anybody say safe deposit box? 06:25.133 --> 06:28.900 align:left position:10% line:71% size:80% HARI SREENIVASAN: The annual cost of San Francisco's program is three quarters of a million dollars. 06:28.900 --> 06:33.900 align:left position:10% line:77% size:80% BRIGITTE MADRIAN: Is it more cost-effective to direct those same financial resources that 06:35.866 --> 06:39.100 align:left position:10% line:77% size:80% are coming from government to early kindergarten readiness programs, smaller class sizes in 06:40.833 --> 06:42.900 align:left position:40% line:89% size:50% K-12? 06:42.900 --> 06:47.000 align:left position:10% line:77% size:80% Which one gives you more bang for the buck I think is still a very open question. 06:47.000 --> 06:50.966 align:left position:20% line:71% size:70% HARI SREENIVASAN: As for the William Cobb Elementary students, the most popular future 06:50.966 --> 06:53.600 align:left position:20% line:83% size:70% career cited on this field trip, superhero. 06:53.600 --> 06:55.866 align:left position:10% line:83% size:80% WOMAN: So what do you want to be when you grow up? 06:55.866 --> 06:57.966 align:left position:20% line:89% size:70% STUDENT: A superhero. 06:57.966 --> 07:01.866 align:left position:10% line:77% size:80% HARI SREENIVASAN: Six-year-old Xavier Ochoa said he wants to be Batman when he grows up, 07:03.066 --> 07:04.300 align:left position:20% line:83% size:70% but he also got the message of the day. 07:04.300 --> 07:05.733 align:left position:20% line:83% size:70% JOSE CISNEROS: I would like to make a deposit. 07:05.733 --> 07:06.933 align:left position:10% line:83% size:80% XAVIER OCHOA, Student: I would like to make a deposit. 07:06.933 --> 07:10.333 align:left position:20% line:83% size:70% JOSE CISNEROS: In my college savings account. 07:10.333 --> 07:15.333 align:left position:20% line:83% size:70% XAVIER OCHOA: In my college savings account. 07:16.833 --> 07:18.566 align:left position:20% line:83% size:70% JOSE CISNEROS: Here's your receipt. 07:18.566 --> 07:19.566 align:left position:40% line:89% size:50% OK. 07:19.566 --> 07:20.566 align:left position:30% line:89% size:60% Say thank you. 07:20.566 --> 07:22.533 align:left position:20% line:89% size:70% XAVIER OCHOA: Thank you. 07:22.533 --> 07:23.333 align:left position:10% line:77% size:80% I want to get money for college, so I can learn more things, and so you can learn when 07:23.333 --> 07:24.833 align:left position:20% line:89% size:70% you want to grow up. 07:24.833 --> 07:24.966 align:left position:10% line:83% size:80% HARI SREENIVASAN: For the "PBS NewsHour," I'm Hari Sreenivasan.