The first phase of Lansing SAVE (Student Accounts Valuing Education) involves 357 kindergarten students in five Lansing School District elementary schools who will have an MSU Federal Credit Union education savings account opened in their name.
The concept, Child Development Account, allows low-income families to implement positive financial behaviors in childhood that will become beneficial in adulthood.
"This provides a financial platform where a child can start to accrue savings and build a foundation for economic mobility," said Trina Shanks, associate professor at the U-M School of Social Work and a faculty associate at the Institute for Social Research.
Shanks has collaborated with former U-M faculty member Daphna Oyserman (who is now at the University of Southern California) and Megan Kurskik of the Community Economic Development Association of Michigan for nearly two years to plan the Lansing SAVE program. Shanks has been involved in similar child savings account programs throughout the country, and has seen the concept become a publicly funded part of several state and local governments.
In the next four years, additional cohorts of elementary students will join until every kindergarten student in the Lansing School District has a MSU Federal Credit Union savings account. Kindergarteners currently enrolled in Cumberland, Lyons, Reo, Riddle and Willow schools will be the first to enroll in the program.
The MSU Federal Credit Union will deposit the first $5 in each account, which will then be available for family members and friends to add to the savings account. The Lansing SAVE partners will also seek private sponsors to contribute to the accounts.
"This is a wonderful opportunity for our students to learn the value of saving money for the future," said Lansing School District superintendent Yvonne Caamal Canul.
Lansing SAVE account holders will receive in-school financial education provided by the MSU Federal Credit Union and participate in activities that help them set goals and envision a future college-bound identity. Parents of Lansing SAVE account holders may also receive free financial counseling to plan for their child's future educational goals.
Shanks said other Michigan communities are looking to Lansing as an example for their own college savings initiatives. Barry County, located in western Michigan, will launch a similar program this fall.
The Lansing SAVE program design and evaluation is supported by U-M and the University of Southern California.