This story was originally published on Dec. 1 by THE CITY. Sign up here to get the latest stories from THE CITY delivered to you each morning.
Costs of college are rising in New York, and across the U.S. How will you pay for it?
If you have a child in fourth grade or younger in a New York City public school, they probably already have a college savings account. How? Because of NYC Kids Rise, which starting in 2021 set up every kindergartener with an account and an initial deposit of $100.
The nonprofit’s Save for College Program works with the city Department of Education to automatically enroll every child in public or charter schools, unless their parent or guardian chooses to opt out. Those funds go to a NY 529 College Savings Direct Plan — a tax-free investment account designed specifically for higher education.
A 529 plan is a state-sponsored savings account whose earnings can be withdrawn tax-free for qualified expenses.
Here’s how the New York City saving plan works, and what else to know about saving for your New York kid:
How it works
Every student gets an initial $100, just for activating their NYC Kids Rise scholarship account. That happens automatically when a child enrolls in public school in NYC, currently through fourth grade. Families can take additional steps to earn more rewards, and community organizations have programs to add more money into these accounts (more on this below).
Families also have the option to open a separate personal savings account connected to the scholarship account, which gives them the option to deposit their own money into college savings. Parents can choose to make it an investment account or a traditional bank account that earns interest each year.
Starting in first grade, NYC Kids Rise will also match money deposited into the savings account up to $100 in a one-time contribution.
The program is funded by a mix of public and private dollars. The city’s budget for the program was $12.7 million in 2025.
Launched as a pilot program under the de Blasio administration, it was originally financed by the head of the investment firm Blackstone, John Gray, and his wife, Mindy. NYC Kids Rise was created to oversee the program, and was first chaired by Upper East City Council Member Julie Menin, who had the idea for the program while serving as the commissioner for consumer affairs.
The pilot program started in Community School District 30 stemming from Long Island City and Astoria to Corona and East Elmhurst in western Queens. In the first three years of the pilot more than 10,000 K-2 students accumulated more than $3.5 million in savings.
To opt out of the program, parents can return a signed opt-out notice or designate they want to opt out in their NYC Schools Account within a 30-day period from when their child enrolls in school.
Who’s eligible?
All students are eligible for the NYC scholarship account with $100 in it, and the program has been growing by a grade each year since its launch — so next year, all students in kindergarten through fifth grade can join. Students must attend a participating school for at least 60 days to be enrolled, and 2025-26 kindergarteners will be able to access their accounts in January.
Charter schools have the option to opt out, but most participate. Parents interested in sending a child to a charter school and utilizing the Save for College program should confirm the school participates.
What about kids who are older than 4th grade?
Students beyond fourth grade are currently not included in the NYC Kids Rise Save for College program. If families of these students have not started to save yet, Chris McGee, chair of the College Savings Foundation, says it’s not too late.
“There are a lot of guilt points with being a parent,” McGee said. “Don’t worry that you’re starting late. Don’t worry that you can’t save all of what it’s going to take to make your child’s post-secondary dreams realized, just start.”
Families can open a 529 plan with a financial institution at any time without the help of NYC Kids Rise, using a Social Security number or Individual Taxpayer Identification Number.
Can New Yorkers who are not citizens get an account?
Immigration status does not affect a student’s eligibility to participate because individual parents or students do not own or manage the account; the nonprofit owns and manages NYC Scholarship Accounts on behalf of all students.
However, opening a savings account alongside the scholarship account does require a Social Security number or an Individual Taxpayer Identification Number — a potential barrier for noncitizen students. The only difference between the scholarship account and the savings account is that students and their families can deposit their own money into the savings account, but not into the scholarship fund.
What can the funds be used for?
The scholarship funds can be used for tuition, fees, equipment, some room-and-board expenses, and textbooks, at higher education institutions in the U.S. and abroad, which includes four-year universities, graduate schools, community colleges, trade and vocational schools, and some apprenticeship programs.
How big of a difference can this account make, really?
Even if the account just has the initial $100 (or $300, if you open a connected savings account and maximize matching) in it, families could see that number double or even triple over the course of 13 years, the nonprofit said.
The scholarship account, and potentially the savings account, depending on which account a family chooses, are investment accounts — invested in things like stocks, bonds, mutual funds — and grow with rates of return similar to other invested money.
“This is really a tool for kids, for New York City as a city to come together to invest in our kids, making our statement to kids that we believe in you and that also giving real resources to that effect,” Debra-Ellen Glickstein, founding executive director of NYC Kids Rise, said.
She also adds that affordability is the current issue New Yorkers are facing and this program gives families the opportunity to build future generational wealth and assets by earning degrees and landing higher-income jobs.
Nadia Landy is a Medicaid coordinator and mother of three who lives in Astoria Houses, a public housing development in Queens. Landy lives in the pilot district of the NYC Kids Rise Program, and so her eighth grade daughter has had a scholarship account since second grade. Aside from the initial $100, Landy has opened a savings account in conjunction for her daughter that she adds money to from her paycheck each month.
Her daughter has also received funding awards donated by the Astoria Houses tenant association worth $1,000 and another award for students living in Queens public housing developments worth $126. (More on how to get local scholarships below.) Between the scholarship and savings account, she now has over $4,000 in savings.
Knowing that her daughter has some savings set aside for her future has made Landy feel more secure for what’s to come.
“I don’t want to wait until the last minute to scramble for funds or trying to find all these credit unions and stuff and getting the highest interest rates,” Landy says. “I dealt with that when I was in college…I had to know all of these costs. You have to pay so much fees, fees just to get into college. So just, I’m glad that this program exists for people like me.”
How can my student receive scholarships or additional rewards?
Community scholarships are opportunities for local organizations, businesses, neighbors and systems to donate directly to students’ NYC scholarship accounts.
Students can receive community scholarships based on their school or community district, grade level, ZIP code, or through NYC Housing Authority or other housing developments. If your child qualifies, funding will be deposited directly into their account.
By opening a savings account and connecting it to your child’s NYC Scholarship Account, you can unlock a $25 reward from NYC Kids Rise toward their scholarship account. Another $25 reward can be unlocked when you make your first deposit in their account. And as stated above, starting in first grade, NYC Kids Rise will match money deposited into the connected 529 account, up to $100.
What if my kid leaves NYC public schools at some point?
Once your child has received a scholarship account, they continue to have access to that account if they leave the NYC public school system. If they transfer to a private school or leave New York City, they will still be able to use the funds already in their scholarship account, but will not be eligible to earn additional rewards.
Even if a student were to drop out of high school in the future, they would still be able to use their scholarship funds for future educational opportunities up until 20 years after they completed kindergarten.
The rules around 529 accounts are subject to change based on federal or state tax laws and NYC Kids Rise has told THE CITY they will offer more detailed guidelines as the first class of students gets closer to graduation.
What if my kid doesn’t go to college?
Students need to use funds in their NYC Scholarship Account 20 years after they complete kindergarten, otherwise their funds will go back to NYC Kids Rise to support other students participating in the program.
However, the savings account, which you own, will have different rules depending on which type of account you choose to open.
What are the best ways for parents to save?
While there is no magic number for what the perfect amount is to have saved to prepare for a child’s future, the general advice is to save at least a little bit regularly.
Research shows that a low- to moderate-income child, even with a small amount of savings — $1 to $499 — is four times more likely to enroll in college than a child with no savings account. If a low- to moderate-income child has $500 or more in savings, they are five times more likely to graduate from college than a child with no savings.
Aside from saving, McGee from the College Savings Foundation says just talking about the future with kids helps them prepare for it.
“One of the most powerful tools parents can have is the kitchen table and just talking to their kids about their dreams after high school, what they want to do, what they’re good at, what they’re passionate about, and then finding ways to make that happen. It is not a one-time discussion. It’s a regular discussion,” McGee said.
Shenean Lindsay, superintendent of District 17 in Brooklyn, has said that since the program launched, she has heard students talk more about long-term plans.
“When I grow up, I’m going to this college, I’m going to start my own business,” Lindsay says, recalling things she has overheard kids in her district say.
I want to contribute to a college account for a family member or friend. How do I do that?
You can only contribute to a student’s account if their parent or guardian has taken the additional step to open a savings account in conjunction with the scholarship account and they chose the NY 529 Direct Plan Account.
529 plans have a gifting option, which allows for family and friends to deposit money into someone’s account on their behalf.
“I think 529s in particular are great in that it takes a village these days. I mean, higher education is incredibly expensive, and the parents scrimp and save. Student loans are at an all-time high — 1.5 plus trillion dollars,” McGee said. “And so 529 can help facilitate relatives and family friends to make contributions to that child’s 529 account.”
Contributions can be made by check payable to “New York’s 529 College Savings Program Direct Plan” and make sure to include the account number of the beneficiary. The account holder can also sign up for Ugift, link their savings account, and give family and friends a code that allows them to make online contributions to the students savings account.
Be aware that only account owners are eligible for the New York State income tax deduction on contributions made to their accounts.
Added benefit: Financial literacy for kids
While savings are the crux of the program, educators add the program encourages financial literacy and long-term planning from a young age.
Lindsay sees the program narrowing the gap between students’ school and home lives. She remarks that it’s easier to convince students why it’s important to pass a test or do their homework when she can tie in how committing to their studies will have a direct impact on whatever their long-term goals may be.
Lindsay, who suggests the program’s ultimate impact is economic mobility, has made efforts to implement educational opportunities to supplement the program in her district.
“We have financial literacy classes for our students. We also have college fair days, we have family workshops, we have goal setting activities,” Lindsay said. “We also encourage our schools to host things like Future Fridays where our students can explore careers and talk about how they can use their NYC Kids Rise account as part of the journey towards their careers in college.”
Meisha Porter, former chancellor of the city Department of Education, is now on the board of NYC Kids Rise and was running the school system when the program went citywide.
She talked to THE CITY about the impact the program has on students who previously may have thought college was not for them.
“I would also say for students of color, or first-gen students who might not have the example of someone who had family who’s gone to college, it activates that thinking about college and career readiness in the early grades for them,” she said. “And one of the indicators that we like to think about a lot is that simply having the account changes the mindset and belief about opportunities for young people to know that college is actually an option for them.”
Like Lindsay, Porter recognizes that a benefit of the program is teaching students about savings and personal finances in New York City Public Schools. It’s often the first time kids — typically with their parents’ help — will open a savings account, make investments and watch their money grow.
