News Column

Cuyahoga County Opens First 10,000 College Savings Accounts

May 27, 2014



CLEVELAND, May 27 -- Cuyahoga County Executive issued the following news release:

Joined by officials from KeyBank, the Cleveland Metropolitan School District, and the Cuyahoga County Educational Service Center, Cuyahoga County Executive Ed FitzGerald held a press conference at Campus International in Cleveland today to announce that his administration has opened college savings accounts for public school students who began kindergarten during the 2013-2014 school year.

"Access to higher education is one of the most critical pieces of ensuring that our children will enter the workforce prepared for success," said FitzGerald. "Young people today will be competing in a global economy, and we need to do everything we can to provide them with every possible opportunity to succeed. I am proud that Cuyahoga County is establishing the first countywide college savings account program in the nation in order to promote higher education every young person today."

The Cuyahoga County College Savings Account program is the first such initiative to establish universal savings accounts at the county level of government. Welcome packets will be sent out within three weeks to roughly 10,500 households with students in public districts along with a book of deposit slips to promote participation in the initiative. Students outside the public district systems will also receive welcome packets for the College Savings Account program at a later date. Additional information regarding the College Savings Account program is available at http://collegesavings.cuyahogacounty.us.

"One of the central tenets of the Cleveland Plan is an emphasis on career and college readiness beginning in the earliest years," said CMSD CEO Eric Gordon. "The County's college savings program directly supports this goal."

Gordon said the program aligns with the work of CMSD partners like College Now and the Higher Education Compact that are helping CMSD to increase the number of students who enroll in and complete college.

Research has consistently demonstrated the benefits of establishing college savings accounts for children. A 2010 study found that young people who expect to graduate from college and have a savings account are about seven times more likely to attend college than their peers. In addition, a Sallie Mae study found that 62% of families were saving for college prior to the last recession, but only 51% were saving afterwards. FitzGerald's program should be especially helpful for low and middle-income families, since only 27% of low-income families and 40% of middle-income families currently have a plan to save for college.

"The College Savings Program provides many advantages for our children. In addition to building a financial foundation, the program also gives parents the opportunity to begin conversations with their children about financial education," said Lisa Oliver, KeyBank Cleveland Market President. "Through proper use of the program, we are positioning our children to have brighter futures."

Approximately 15,000 students enter kindergarten each year in Cuyahoga County through 31 school districts and more than 150 charter, parochial, and independent schools. Every student enrolled in kindergarten by October 31 of a school year will be eligible to participate, with families reserving the right to opt out at their discretion. New accounts will then be established for students entering kindergarten on an annual basis each fall. FitzGerald was joined this afternoon by Lucia Johnson, a single mother whose kindergartner attends school in Cuyahoga Heights.

"I'd like to thank County Executive FitzGerald for his vision and leadership," said Dr. Bob Mengerink, superintendent of the Educational Service Center of Cuyahoga County. "The Cuyahoga County ESC views this program as a powerful way to increase the aspirations of every family and child in Cuyahoga County as they begin preparing financially and educationally for success in our competitive global society."

Moving forward, Cuyahoga County will receive annual data from schools and school districts with assistance from the County's Educational Service Center (ESC) and provide the list of students to its partners at KeyBank, which will generate account numbers for students enrolling in kindergarten. Families will be able to make deposits at KeyBank braches, by mail, or through direct deposit. Although the program is starting with kindergarten students this year, families with older children are encouraged to work with KeyBank to establish alternative savings programs.

FitzGerald first outlined the importance of establishing a countywide college savings program during his 2010 campaign for County Executive, and just last year the Cuyahoga County Council approved his request for $2 million to establish $100 college savings accounts for every student entering kindergarten in the county.

"Children's Savings Accounts (CSAs) are gaining traction around the country and collectively, these innovations are helping thousands of students, many low-income, save for college," added Dr. William Elliott, director of the Assets and Education Initiative at the University of Kansas. "In the absence of national CSA policy, some states and localities have blazed the path and developed their own children's savings initiatives such as in Cuyahoga County, strengthening the case for broader CSA implementation."

Campus International, the only International Baccalaureate candidate school in the Cleveland Metropolitan School District, prepares students in grades K-5 for international citizenship with a rigorous and comprehensive IB, global curriculum. Situated on Cleveland State University's downtown campus, the K-4 Mandarin Chinese immersion school provides students with easy access to city and campus events, programs and cultural opportunities. Downtown Cleveland and CSU provide an expansive classroom for students attending this New & Innovative School in CMSD's expanding portfolio of "Effective" and "Excellent" school models. - See more at: http://executive.cuyahogacounty.us/en-US/052714-College-Savings-Accounts.aspx#sthash.l1xTtgPS.dpuf

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