The City of Boston gave every kindergartner $50 in a savings account as the school year started on Monday.
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The program began in 2016 with a pilot program in 11 schools and is set to go statewide in 2020. Now, Boston Saves is reaching 4,000 kindergartners, who are automatically enrolled in an online savings account that they can use after graduating high school or completing their GED.
"This school year, we're celebrating the full-scale launch of a great program called Boston Saves. Through Boston Saves, kindergartners are automatically set up with a savings account for college and career training," Boston Mayor Marty Walsh said in a video posted on Monday.
Parents are incentivized to link their own account (like a 529 college savings plan) to their child's savings account. There are various incentives ranging from $20 to $25 a year encouraging parents to continue saving or even just read with their child, according to the Boston Saves website.
"Boston Saves is a program that Mayor Walsh announced shortly after he stepped into office. ... Through Boston Saves, we are showing families and their children that their City, schools, and community will support their efforts to achieve the future they imagine for themselves," Boston Saves manager Gosia Tomaszewska told FOXBusiness.
The program will cost Boston about $200,000 a year. Nonprofits and the private sector are also contributing.
Boston is launching its citywide program as many people are identifying student loan debt as a growing problem. While undergraduate students are not taking out as many federal student loans as they were five years ago, their parents are more likely to take out federal loans than they were in the past.