Hear me out.

Everyone hates welfare, but almost everyone loves some level of public support of education, child-care, that sorta thing.

The US public education seems to be almost as wasteful as its healthcare system and its social security system.

What would the pros and cons be of taking a small portion (say $2/day, perhaps inflation-adjusted) of the money spent on the education of every single child in the US every month and putting it in a personal inflation-beating investment portfolio--composed of eg. index funds--of some sort with a reasonable level of risk? The idea would be that money can go in but parents can't take it out and neither can the account-holder until he turns 18, and perhaps not even then.

Kids would be told about this account from an early age, preschool at the latest. Over the course of grade school and on through highschool this personal savings fund would form the core of a basic course aimed towards fostering financial literacy. Every year they'd get a little update on the estimated value of their portfolio. This way there would be a summat class-neutral way to keep children aware of these issues and possibly also even hopeful wrt future prospects. It would also help parents with the sometimes difficult task of saving for their children's futures.

When they turn 18 they may perhaps be able to use their portfolio as eg. security for a decent student loan.





Whatcha reckon? What are the potential benefits? What are the pitfalls?