State launches college savings accounts for low-income children
Low-income families will receive college savings accounts for their children beginning this week, with the state providing seed deposits of up to $1,500 per child, Gov. Gavin Newsom announced.
The CalKIDS program, administered by the state’s ScholarShare Investment Board, provides college savings accounts for all low-income children in first through 12th grade. Enrollment is automatic, with eligibility based on the Local Control Funding Formula.
In addition, CalKIDS provides college accounts for all California newborns, regardless of the family’s income. The state will contribute up to $100 for each account. For both programs, families can contribute their own money and merge the account with an existing 529 account.
In all, California will contribute more than $1.9 billion toward the accounts.
The goal is to encourage children and families to begin thinking about college from a young age. Children with college savings accounts are more likely to finish school and attend college, according to research. Several other states offer similar programs for young people.
“California is telling our students that we believe they’re college material — not only do we believe it, we’ll invest in them directly,” Newsom said. “With up to $1,500, we’re transforming lives, generating college-going mindsets and creating generational wealth for millions of Californians.”
Read more:
- How savings accounts help students get to college
- How ‘Mama Brown’ changed students’ lives by paying for college and so much more: ‘It’s not about the money’