Day: July 10, 2026

Every kindergartner entering a New York City public school will now receive $1,000 automatically deposited into a tax-advantaged college savings account, a tenfold increase from the program’s previous $100 contribution. The expansion, part of a fiscal year 2027 budget agreement between Mayor Zohran Mamdani and City Council Speaker Julie Menin, makes New York City’s Save for College Program the largest universal college savings initiative in the United States.

Key Takeaways

• NYC kindergartners will automatically receive $1,000 in 529 college savings accounts, up from $100, under the fiscal year 2027 budget deal
• City Council Speaker Julie Menin championed the $64 million expansion as a tool for addressing income inequality and boosting future wages
• The NYC Kids Rise Save for College Program, which began as a pilot in Queens in 2017, now covers all kindergarten through fourth-grade students citywide
• The budget also restores more than $26 million in education programs that were at risk of cuts, including school-based mental health clinics and a sensory disability program
• All students are eligible regardless of immigration status, and most charter schools have opted into the program

How Does The NYC Kids Rise College Savings Program Work?

The program operates through the nonprofit NYC Kids Rise, which manages scholarship accounts on behalf of participating students. Each account is invested in a New York 529 College Savings Direct Plan, a tax-advantaged account specifically designed for higher education expenses. The funds can cover tuition, fees, textbooks, equipment, and certain room-and-board costs at eligible institutions across the country and abroad, including four-year universities, community colleges, trade and vocational schools, and eligible apprenticeship programs.

Enrollment is automatic. Every kindergartner attending a New York City public school — including most charter schools that have opted into the program — receives an NYC Scholarship Account unless a parent or guardian actively chooses to opt out. Students must attend a participating school for at least 60 days to be enrolled. The program does not require a Social Security number or Individual Taxpayer Identification Number, meaning all students are eligible regardless of immigration status.

The NYC Kids Rise program launched as a pilot in 2017 within the boundaries of Community School District 30 in Queens, serving neighborhoods including Astoria, Long Island City, Jackson Heights, East Elmhurst, Corona, Sunnyside, and Woodside. The city expanded the program to all public school kindergartners starting in the 2021–22 school year as part of the Juneteenth Economic Justice Plan. As of the 2025–26 school year, all students in kindergarten through fourth grade are eligible. The tenfold increase to $1,000 per account will take effect under the new budget.

Beyond the initial city deposit, the program is designed to encourage additional family and community contributions. Families who open a connected savings account and link it to their child’s NYC Scholarship Account can unlock a $25 reward from NYC Kids Rise. A first deposit into that connected account triggers an additional $25 reward. Starting in first grade, NYC Kids Rise matches family deposits into the linked 529 account up to $100 per year. Local businesses and organizations can also contribute through community scholarships.

Students retain access to their scholarship funds even if they transfer to a private school, move out of New York City, or leave the public school system entirely. If a student does not claim the funds within 20 years of completing kindergarten, the money returns to NYC Kids Rise to support future participants.

Why Did City Council Prioritize This Expansion?

City Council Speaker Julie Menin made the college savings expansion a signature priority during budget negotiations, framing the program as a direct mechanism for reducing income inequality and increasing economic mobility. Menin cited research showing that individuals who complete postsecondary education earn nearly double the lifetime wages of those who stop at a high school diploma.

The research foundation supporting the program extends further. Studies on children’s savings accounts have found that a low-to-moderate-income child with even a small amount of savings — between $1 and $499 — is four times more likely to enroll in college than a child with no savings account at all. The theory is that the existence of a dedicated account shifts both parental expectations and children’s self-concept around college attendance, creating a psychological and financial on-ramp to higher education that begins years before an application is ever submitted.

The City Council had initially pushed for an even more ambitious structure, proposing $3,000 deposits for children from low-income families. That tiered approach did not make it into the final budget agreement. The adopted version provides a universal $1,000 deposit across all income levels, with the $64 million program cost representing one of the largest single education line items added during the Mamdani-Menin budget negotiations.

What Other Education Programs Were Restored In The Budget Deal?

The college savings expansion was not the only education victory in the budget agreement. Several programs that Mayor Zohran Mamdani had excluded from his preliminary budget proposal earlier in 2026 were restored after sustained pressure from advocacy organizations and City Council members. The Coalition for Equitable Education Funding, a group of more than 120 advocacy organizations, confirmed the following restorations and praised the administration and City Council for preserving services that affect thousands of students and families.

Program	Funding Restored	Function
Sensory Exploration, Education & Discovery (SEED)	$8.4 million	Supports students with disabilities who have sensory issues interfering with learning
Restorative Justice	$6 million	Funds less punitive disciplinary approaches including peer mediation and circle discussions
Mental Health Continuum	$5 million	Operates mental health support at 50 schools including school-based clinics in the South Bronx and Brooklyn
Immigrant Family Outreach	$4 million	Funds communication with families in home languages, including translation services and ethnic media outreach
Student Success Centers	$3.3 million	Trains youth leaders to guide high school students through the college admissions process

One significant unresolved question from the budget negotiations involves the fate of an $8.9 million contract with the nonprofit New Visions for Public Schools, which operates a data portal that consolidates information from multiple city databases into a single platform for school administrators. Educators and lawmakers have called the portal a critical time-saving tool, and its potential elimination drew pushback from school leaders across the system. The Mamdani administration had not confirmed as of the budget announcement whether the contract would be restored.

Where Does The Budget Deal Fit In NYC’s Broader Education Spending Picture?

The college savings expansion and program restorations are components of a larger $125.8 billion city budget that allocates a significant share of resources to education. The Mamdani administration continued the pandemic-era practice of shielding school budgets from enrollment-based cuts, committing $290 million to maintain funding at schools with declining student populations. The city also scaled back its timeline for complying with a state mandate to reduce class sizes after negotiating a deadline extension with Albany, reducing the immediate spending commitment from an initially proposed $543 million to a lower figure in the adopted plan.

The universal $1,000 deposit is a long-term bet that early financial infrastructure — a dedicated account, community reinforcement, and growing investment returns over 13-plus years of schooling — can shift postsecondary outcomes at scale in a system that serves approximately 912,000 students, making New York City’s approach to college savings a national test case for whether seed money at age five can reshape economic trajectories by age 18.

 

FAQs

How much will NYC kindergartners receive in their college savings accounts? Every kindergartner enrolled in a New York City public school or participating charter school will automatically receive $1,000 deposited into a 529 college savings account managed by the nonprofit NYC Kids Rise. The previous deposit amount was $100 per student. The funds are invested in a New York 529 College Savings Direct Plan and are expected to grow over time before students access them for higher education expenses.

Who is eligible for the NYC Kids Rise Save for College Program? All kindergarten through fourth-grade students enrolled in New York City public schools and participating charter schools are eligible. Students must attend a participating school for at least 60 days to be enrolled. The program does not require a Social Security number or tax identification number, meaning all students can participate regardless of their family’s immigration status. Enrollment is automatic unless a parent or guardian opts out during a designated opt-out window.

What can the college savings funds be used for? The 529 account funds can be used for qualified higher education expenses at eligible institutions in the United States and abroad. Covered expenses include tuition, fees, textbooks, equipment, and some room-and-board costs. Eligible institutions include four-year colleges and universities, community colleges, trade and vocational schools, eligible apprenticeship programs, and accredited online degree programs.

What happens if a student leaves the NYC public school system? Students retain access to their scholarship account funds even if they transfer to a private school, move out of New York City, or leave the public school system. However, students who leave will not be eligible to earn additional rewards or deposit-matching contributions from NYC Kids Rise. Funds must be used within 20 years of completing kindergarten; unclaimed funds return to NYC Kids Rise to support future participants.

Can families add money to the college savings accounts? Families can open a connected savings account and link it to their child’s NYC Scholarship Account. Doing so unlocks a $25 reward, and making a first deposit triggers an additional $25 reward. Starting in first grade, NYC Kids Rise matches family deposits up to $100 per year. Local businesses and community organizations can also contribute through community scholarship programs.

How much is the NYC Kids Rise expansion costing the city? City Council Speaker Julie Menin described the expansion as a $64 million initiative, making it the largest universal college savings program in the country. The program is funded through the city’s fiscal year 2027 budget, which was agreed upon by Mayor Zohran Mamdani and the City Council on June 30, 2026.

What education programs were restored in the NYC budget deal? The budget restores more than $26 million in education programs that were at risk of cuts, including the Sensory Exploration, Education and Discovery program for students with disabilities ($8.4 million), restorative justice initiatives ($6 million), the Mental Health Continuum providing school-based clinics ($5 million), immigrant family outreach ($4 million), and Student Success Centers for college guidance ($3.3 million).

Did the City Council get everything it wanted in the budget deal? The City Council initially proposed $3,000 deposits for children from low-income families, but the final agreement adopted a universal $1,000 deposit for all kindergartners regardless of income level. The tiered structure favoring low-income families did not make it into the final budget deal.

New York City’s fiscal year 2027 education budget has climbed to $38.6 billion following an $894 million increase, even as a new analysis from the Success Academy charter network reveals that 906 city schools — roughly half the system — had fewer than 50% of students passing state math, reading, or both exams last year. The collision of record-level spending and persistent underperformance is drawing renewed scrutiny to how the nation’s largest school district allocates its resources.

Key Takeaways

• New York City’s Department of Education budget rose by $894 million to $38.6 billion for fiscal year 2027, consuming 31% of the city’s $126 billion spending plan
• A Success Academy report found 906 NYC schools had fewer than half of students passing state math, reading, or both, enrolling 409,379 students — 43% of all public school children
• In 503 of those schools, a majority of students failed to reach proficiency in both subjects
• The city has spent nearly $1.9 billion since 2020 on “hold harmless” policies that maintain funding at schools with declining enrollment
• Per-pupil spending in New York City Public Schools has reached approximately $42,000, roughly double the national average

What Does The Success Academy Report Reveal About NYC School Performance?

The report, titled “By Any Honest Measure,” represents what Success Academy founder and CEO Eva Moskowitz has described as the most comprehensive review to date of chronically low-performing schools in New York City. Success Academy staff spent months analyzing primary public records, including New York State Education Department accountability data dating back to 2012, NYC school quality reports, expenditure files, and standardized test results.

The central finding is stark. Of New York City Public Schools’ roughly 1,600 campuses, 906 had fewer than half of their students passing state exams in math, reading, or both during the 2024–25 school year. Within that group, 503 schools saw a majority of students fail to reach proficiency in both subjects. Those 906 schools collectively enroll 409,379 students, accounting for 43% of the entire public school population of approximately 912,000.

The failure rates escalate as students age. According to the Success Academy analysis, 34% of elementary school students attend a school that meets the report’s failing threshold. That figure rises to 49% for middle schoolers and 62% for high schoolers. The pattern suggests students are frequently routed from a low-performing elementary school into a low-performing middle school and then into a low-performing high school, with no structural intervention breaking the cycle.

Roughly one-third of the 906 schools identified in the report have appeared on state accountability lists since 2012, with some carrying failure designations for over a decade. The report argues that those schools have received additional funding, gone through merges and rebranding, but were never substantively turned around.

How Does The $38.6 Billion Budget Compare To Student Outcomes?

The disconnect between spending and academic outcomes is the central tension animating the budget debate. New York City Public Schools spent approximately $40 billion on public education in fiscal year 2024, translating to roughly $36,293 per pupil — a figure that the city’s Department of Education reports has since risen to an all-time high of approximately $42,000 per student. That per-pupil figure is roughly double the national average of $17,619, according to federal data.

The fiscal year 2027 budget pushes Department of Education funding to $38.6 billion, an increase of $894 million. Education spending now accounts for 31% of the city’s overall $126 billion budget. The increase arrives despite projected declines in K-12 enrollment; in the 2024–25 school year alone, New York City Public Schools enrolled 2,500 fewer pre-K students and 1,200 fewer kindergartners than the prior year.

Metric	NYC Public Schools	National Average
Per-Pupil Spending	~$42,000	~$17,619
Schools With <50% Passing Math/Reading	906 of ~1,600	N/A
Students in Those Schools	409,379 (43%)	N/A
Chronic Absenteeism Rate	~35%	~26% (pre-pandemic baseline)

The Department of Education budget figure excludes pension and benefit costs, meaning the actual taxpayer burden is higher than $38.6 billion. Andrew Rein, president of the Citizens Budget Commission, has argued that the city is effectively budgeting for students who no longer exist, calling the approach unfair and a missed opportunity to redirect spending toward programs that serve current students or build fiscal reserves.

Why Has The City’s “Hold Harmless” Policy Drawn Criticism?

A significant portion of the funding increase is tied to New York City’s “hold harmless” policy, which shields schools experiencing enrollment declines from corresponding budget cuts. Since 2020, the city has spent nearly $1.9 billion maintaining funding levels at schools that are losing students, according to Chalkbeat New York’s analysis. For fiscal year 2027 alone, at least $400 million in the budget is allocated to maintain existing funding at under-enrolled schools.

The policy was originally conceived as a pandemic-era safeguard to prevent layoffs and program cuts at schools where families temporarily pulled students out of the system. Six years later, the city has made no public plan to phase it out, even at schools where enrollment losses appear permanent and academic performance remains chronically low. No plan currently exists to close schools that are consistently failing to attract or retain families.

City Hall has defended the spending trajectory. Spokesperson Jenna Lyle stated that the administration’s approach reflects fiscal responsibility, arguing that children deserve a city that invests in them rather than one that balances its budget at their expense.

What Role Does Budget Transparency Play In This Debate?

The New York Post reported in early July that the Mamdani administration had quietly added approximately $680 million to the Department of Education’s budget beyond what was included in the mayor’s earlier proposal. The revised figures appeared in budget documents released after the City Council approved the broader spending plan on June 29, raising questions about whether all council members fully understood the scope of the education spending increase they voted to approve.

The timing drew particular scrutiny because Mayor Zohran Mamdani had spent months projecting fiscal discipline. At the November 2025 SOMOS conference, shortly after taking office, Mamdani had pledged to bring efficiency to the Department of Education by cutting contracts and consultant costs. The adopted budget moved in the opposite direction, with the Department of Education receiving its largest single-year increase in recent memory.

The Success Academy report also pointed to a structural transparency issue: the state legislature in 2015 formally replaced the term “failing school” in state regulations with “struggling school,” a linguistic change that the report argues has contributed to obscuring the depth of the academic crisis from the public.

The convergence of record-breaking education spending and stubbornly low academic outcomes presents the Mamdani administration with a question that cannot be deferred indefinitely — whether continuing to fund a system structured around shielding underperforming schools from consequences can produce results that justify $38.6 billion in annual investment.

 

 

FAQs

How much does New York City spend per student on public education? New York City Public Schools spends approximately $42,000 per student, according to the most recent available data. That figure is roughly double the national average of $17,619 and represents an all-time high for the district. The per-pupil cost is expected to rise further as enrollment continues to decline while overall spending increases.

How many NYC schools are classified as failing in the Success Academy report? The report identified 906 schools where fewer than half of students passed state math, reading, or both exams in the 2024–25 school year. Of those, 503 had a majority of students failing both subjects. The 906 schools enroll 409,379 students, or 43% of the city’s public school population.

What is New York City’s “hold harmless” education funding policy? The “hold harmless” policy maintains school budgets at prior-year levels even when enrollment declines. Since 2020, New York City has spent nearly $1.9 billion on this approach. Critics argue it directs resources toward schools that are losing families rather than toward programs that might address the enrollment losses or improve academic performance.

What are the chronic absenteeism rates in NYC public schools? Approximately 35% of New York City Public Schools students — roughly 300,000 children — were flagged as chronically absent during the most recent school year, meaning they missed at least 10% of required school days. The citywide rate has not returned to pre-pandemic levels and remains a persistent challenge for the district.

How did the $680 million get added to the NYC education budget? The additional funding appeared in adopted budget documents released after the City Council approved the fiscal year 2027 budget on June 29. The New York Post first reported the discrepancy between the mayor’s earlier proposal and the final adopted figure. City Hall has defended the increase but did not publicly announce the change before the documents were published.

What did the New York State Education Department report about student performance? The state’s official 2024–25 results showed 57% of third- through eighth-graders were proficient in math and 53% met proficiency standards in English Language Arts. State officials described the results as showing meaningful improvement, though the Success Academy report argues those topline figures obscure the concentration of failure across hundreds of individual schools.

New York City Public Schools Chancellor Kamar Samuels has directed all principals to halt new educational software purchases until the Education Department finalizes revised artificial intelligence guidelines later this summer. The purchasing freeze, communicated via email to school leaders on July 7, marks the most aggressive step the Mamdani administration has taken to rein in classroom technology amid escalating pressure from parents, educators, and a majority of the City Council.

Key Takeaways

• Chancellor Kamar Samuels instructed NYC principals to pause all new ed-tech software purchases until final AI guidance is released this summer
• The freeze follows months of backlash against the Education Department’s March draft AI policy, which drew nearly 6,500 public comments
• Twenty-nine of 51 City Council members signed a letter calling for a two-year AI moratorium in city schools
• A state comptroller audit found significant gaps in how the department tracks which software products schools use
• Some principals have raised concerns that a mid-July directive disrupts budgets and plans already set for the 2026–27 school year

Why Did The NYC Education Department Freeze Software Purchases?

The purchasing freeze is a direct response to a policy vacuum that has grown increasingly uncomfortable for the Mamdani administration. New York City Public Schools released draft AI guidance in March 2026 built around a traffic-light framework: red-light prohibitions on AI use in grading and discipline, green-light approvals for lesson planning, and vague guidance on the question parents cared about most — whether and how students should interact with AI tools in the classroom.

The reaction was immediate and forceful. Nearly 6,500 public comments flooded the Education Department in response to the draft. Parents packed public meetings and criticized the approach as insufficient. Kelly Clancy, founder of Parents for AI Caution in Educational Spaces, argued publicly that the guidance endangered children’s cognitive development. Chancellor Kamar Samuels acknowledged in May that the department had “missed the mark” and signaled that the final version would impose stricter limits, particularly for younger students.

The Education Department originally promised final guidance by June. That deadline dissolved at a June 24 City Council hearing, where First Deputy Chancellor Danielle Giunta told lawmakers the department needed more time, citing a rapidly shifting national conversation around AI in education. The New York City Education Department has not provided an updated timeline.

What Does The Freeze Mean For Schools Preparing For Fall?

The directive from Chancellor Kamar Samuels exempts software required for mandated services and school-opening operations. But the practical impact extends well beyond new AI products. Many New York City Public Schools rely on software for core functions like attendance tracking, grading systems, and academic intervention programs — and those contracts often require fresh purchase orders each school year, even for platforms schools have used for years. That renewal cycle means long-standing tools could be caught in the freeze.

The timing compounds the disruption. One Manhattan principal, speaking to Chalkbeat New York on condition of anonymity, expressed concern about a directive arriving in mid-July when budgets, intervention plans, and program decisions for the 2026–27 school year were already locked in. Changing direction this late in the summer creates real uncertainty about whether schools will have access to the tools they planned to use, the principal said.

The New York City Education Department maintains that the pause is necessary to ensure proper safety and privacy protocols are in place. Spokesperson Nicole Brownstein described the freeze as part of the department’s effort to ensure every digital tool used in classrooms is properly assessed before deployment.

How Did City Council Push The Education Department Toward This Decision?

The political pressure on the Mamdani administration has been building for months. In early June, 29 of the City Council’s 51 members signed a letter to Mayor Zohran Mamdani and Chancellor Kamar Samuels calling for a two-year moratorium on AI use in city schools. The letter described the Education Department’s draft guidance as flawed and criticized the absence of proposals to strengthen student data privacy protections. A separate public petition seeking a moratorium on generative AI in New York City Public Schools has collected thousands of signatures.

Manhattan Council Member Carmen De La Rosa, who chairs the technology committee, emphasized the depth of what the city does not know about its own classrooms during the June hearing. De La Rosa pointed to significant gaps in the department’s understanding of how AI technology is being deployed across schools and argued that officials needed time to assess what was already happening before releasing policy.

A state comptroller audit released in spring 2026 reinforced those concerns. The audit found that the New York City Education Department’s policies did not fully align with the National Institute of Standards and Technology Cybersecurity Framework and failed to cover fundamental areas related to data privacy and security. With software purchasing decisions largely made at the school level, the department has struggled to maintain a comprehensive inventory of which products are active across the system’s roughly 1,800 schools. The Education Department has since distributed a survey asking schools to report which software they currently use.

Where Does NYC’s AI-In-Schools Policy Stand Now?

The current freeze represents the latest chapter in a turbulent three-year stretch for AI policy in the nation’s largest school system. New York City Public Schools initially blocked ChatGPT entirely in January 2023, then reversed the ban just three months later. Under former Chancellor David Banks, the Education Department leaned into AI optimism, with Banks describing the technology as potentially revolutionary for everything from college advising to student assessment. Banks, however, never finalized a comprehensive policy, leaving the work to the Mamdani administration.

Chancellor Kamar Samuels has struck a markedly different tone, describing AI as the “most invasive technology” the school system has encountered. The department is now considering age-differentiated rules and exploring how to prepare older students for a technology-saturated world without allowing AI to replace independent thinking. But with no public timeline for final guidance, schools are left navigating the 2026–27 planning cycle with frozen purchasing authority and an open question about what tools will be available when students return in September.

The software freeze may be a temporary holding pattern, but it signals that New York City Public Schools is treating AI governance as a structural challenge that requires more than a traffic-light chart — and that the political cost of getting the policy wrong now exceeds the cost of moving slowly.

 

FAQs

What software purchases are affected by the NYC Education Department freeze? The directive covers all new educational technology software purchases. Schools can still acquire tools required for mandated services or essential school-opening functions. However, even annual renewals of long-standing software may be subject to the freeze if they require new purchase orders, which is common across many New York City Public Schools programs.

When will the NYC Education Department release final AI guidance? The Education Department has said only that final guidance will come later this summer, without specifying a date. The original June deadline was pushed back during a City Council hearing on June 24, and the department has not provided an updated timeline as of July 2026.

Why did City Council members call for an AI moratorium in NYC schools? Twenty-nine council members signed a letter citing concerns about student learning outcomes, mental health impacts, data privacy, and the absence of meaningful safeguards in the Education Department’s draft policy. The letter described the March guidance as flawed and called for a two-year pause.

What was wrong with the NYC Education Department’s original AI guidance? The March 2026 draft used a traffic-light system to categorize AI use by risk level. Critics argued it was too permissive, lacked meaningful protections for student data, left student-facing AI use largely unaddressed, and did not account for developmental differences among age groups.

How many NYC schools are affected by the ed-tech purchasing freeze? New York City Public Schools operates roughly 1,800 schools. Because software purchasing decisions are typically made at the school level, the freeze has potential system-wide reach. The Education Department has acknowledged that it does not yet have a comprehensive inventory of which ed-tech products schools are currently using.

What did the state comptroller audit find about NYC schools’ data practices? The spring 2026 audit found that the New York City Education Department’s policies did not fully align with the National Institute of Standards and Technology Cybersecurity Framework and lacked coverage of fundamental areas related to student data privacy and security.