A reader named Philip Serghini writes in:
It would be an interesting experiment if (in, say, Buffalo) every kid entering the first grade were given a $100 savings deposit (paid for by a private foundation). They wouldn’t be allowed to withdraw the money at any time up until they graduate, but they’d be able to add if they wanted. Each grade they ascended, another $100 would be added. If you dropped out or failed out, you’d forfeit everything (except anything you’d voluntarily put in). By the time they graduated from high school, each student would have saved a nice tidy sum to spend as they please: college, car, suit.
Who knows, the kids might even garner a better appreciation for math because of its direct applicability to their savings account. Some kids might be incentivized not to drop out. Others may have learned such an important lesson about savings, interest, and the value of starting to save early they they just keep their savings account open and active after they graduate.
Okay, assuming you can find a willing “private foundation” to put up the dough, what’s to not like about this proposal? I do feel I’ve heard of similar experiments — and of course we’ve all heard about those free-college-tuition plans for kids who graduate high school — but I don’t know if something this simple has ever been tried with an eye toward linking financial literacy and education. Thoughts?