Savings

California begins funding college savings accounts

For millions of parents and children in California, figuring out how to pay for college can seem like an impossible equation.

“We shouldn’t make it so complicated that students decide whether or not to graduate. We should find ways to make it easier for them,” said Assemblyman Adrin Nazarian, who helped create the program.


What do you want to know

  • CalKIDS invests $1.9 billion in accounts for low-income children in grades 1-12 and newborns born on or after July 1
  • All California newborns can earn up to $100 and eligible low-income college students can earn up to an additional $1,500
  • Money can pay for higher education and/or vocational training
  • To estimate the amount that can be saved for a child’s school fees, click here

With the help of Governor Newsom, Nazarian launched a new college savings program to change that. It’s called CalKIDS and it automatically deposits $25 into an account for every child in California born on or after July 1 of this year. Users can also get $25 to register online, plus an additional $50 to link a new or existing Scholarshare 529 account to the CalKIDS account for $100.

Additionally, eligible low-income public school students in grades 1-12 will receive at least $500, and an additional $500 if they are foster youth, plus an additional $500 if they are homeless. shelter for $1,500. Nazarian estimates that 70% of children would qualify for that $500 in Grade 1. The money can pay for college, university, or various vocational and vocational schools.

“Here is the federal government or the state government in this case making that initial investment so that we tell you that we believe in you and that we want you to aspire to accomplish whatever you have in mind,” said Nazarian.

He points to research that shows kids with savings accounts of up to $500 are three times more likely to enroll in college and almost four times more likely to graduate than kids with no savings. .

“That could be a very clear line between whether or not future generations of children can pursue a college education,” Nazarian said.

Currently, he says, only a small percentage of families have a 529 college savings account through the state.

“The idea was to encourage parents, guardians, relatives to make investments,” he said.

Nazarian acknowledges that this is just a drop in the ocean, as reports show that students can expect to pay over $400,000 just for an undergraduate degree in the past few years. next 15 to 20 years.

“Instead of doing nothing and worrying about impending costs, it’s at least a step towards meeting the need,” he said.

Empowering children across California with valuable resources, from cradle to college.