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School's Plan to Create College Savings Accounts Reinvigorates Financial Literacy Debate

LAUSD's Proposal to Create College Savings Accounts for All Students Reinvigorates Financial Literacy Debate

According to 89.3 KPCC, Los Angeles Unified School District is considering a proposal to open college savings accounts for every student in its district in order to encourage students to move through the school system with intentions of enrolling in college.

Authored by school board President Steve Zimmer, the proposal is poised to be voted on in August, leaving some time for the board to decide on the details.

The price tag of such an endeavor is estimated to be $64 million, but some argue that such an effort isn’t needed if officials focus on helping students understand financial aid opportunities available to them.

"In a letter to L.A. Unified leaders,[Campaign for College Opportunity] said students who complete the Free Application for Federal Financial Aid (FAFSA) are almost 50 percent more likely to enroll in college than those who don’t, and those same students who file for aid are 72 percent more likely to reach college graduation once they enroll,” the article said.

This goes hand-in-hand with the idea of providing financial education to all students in order to help them navigate how to handle the increasing costs of higher education.

After all, in May, an annual survey from Discover Student Loans found that parents are expecting children to fund their own college education costs at an accelerated rate.

Right now, only 17 states require high school students to take any kind of economics course, while only five specifically require personal finance instruction. In California, high school students are required to take a least one economics course with no specification for personal finance. 

Some experts argue that personal finance training, given its importance in the real world, should begin much earlier than high school.

Certified financial planner at Syntal Capital Partners Crystal Rau, for example, told TheStreet.com in February that her experience has led her to believe kids should begin learning financial literacy no earlier than second grade.

Perhaps that would save large districts like LAUSD the costs of funding district-wide savings accounts to encourage college enrollment.

 

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Nicole Gorman, Senior Education World Contributor

6/15/2016

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