August 23, 2016
Treasurer Deb Goldberg has her eyes set on Worcester as one of the state’s most under-banked cities and she won’t rest until incoming kindergartners start seeing dollar signs.
Goldberg’s $eedMA program, overseen by her newly-formed Office of Economic Empowerment, aims to increase the percentage of public school students who graduate from college in the city of Worcester, while subsequently combating the distrust and stigmatization of banks. The program will provide a $50 deposit in a tax-advantaged investment plan for any Worcester Public Schools kindergartner who chooses to participate. The 529 plan, managed by Fidelity Investments, requires no broker fee and provides a selection of investments that parents may choose from.
When asked about her decision to establish this initiative in Worcester, Goldberg said she recognized the city’s passion and commitment to its residents.
“Working together with partners from every sector, the city is more than ready to handle the task of leading the charge on college savings,” she said. “Each and every group has embraced their role as ambassadors for $eedMA, and the response has made us confident in the program’s success. This collaboration will ensure that every eligible family in Worcester will have the opportunity to take advantage of this exciting program.”
It seems implausible that Worcester residents would turn up their noses at the notion of a hassle-free college savings account complete with a $50 investment, free of charge. However, between 15-20 percent of Worcester residents remain under-banked or unbanked, meaning they either do not maintain a balance in their checking account or they rely on check cashing services that charge fees running upwards of 5 percent.
Dangers of falling into one of these two categories come full throttle for young families when faced with the reality of college savings. According to the Corporation for Enterprise Development, “Low and moderate income children with $500 or less in savings were three times more likely to enroll in college than children with no savings, and four times more likely to graduate.”