By Assemblyman Phil Ting–
September is Education Savings Month! To celebrate, ScholarShare529, a state-sponsored college savings plan, is offering a $100 bonus when you open an account by the end of this month with an initial deposit of $1,000 or more. Everyone can contribute afterwards. Watch the earnings increase; then, when the time comes, withdrawals for qualified college expenses are tax exempt at both the federal and state levels.
Why start? Research shows that kids with a college savings account of $500 or less are three times more likely to enroll in college and nearly four times more likely to graduate than kids with no savings.
With statistics like these, it’s easy to see the motivation behind another great program we just launched, the California Kids Investment and Development Savings Program, or CalKIDS. It fosters the mindset — even the expectation — of going to college, while helping families kick-start college funds with start-up funds from the state budget of the year. last and this year, totaling more than $2 billion.
College savings accounts will be automatically opened for all low-income California students in grades 1-12 and all newborns born on or after July 1, 2022. The California Department of Education and the California Department of Public Health will identify eligible children, which may include families on CalFresh or CalWORKS. There is no application required and there is no requirement that families make a financial commitment. The state-funded single repositories are as follows:
Up to $1,500 for 3.4 million school-aged children:
- $500 Autodeposit: Eligible low-income public school students in grades 1-12;
- Additional deposit of $500: for youth in foster care;
- Additional deposit of $500: for homeless youth.
Up to $100 for newborns, regardless of income:
- $25 automatic deposit: each eligible child born on or after July 1, 2022;
- Additional deposit of $25: those who register through the program’s online portal;
- $50 Additional Deposit: Those who link a new or existing ScholarShare 529 account to the CalKIDS account.
Although people cannot directly add money to a CalKIDS account, they can open a ScholarShare 529 college savings account to make their own deposits and then link the CalKIDS account to it. CalKIDS is managed by the ScholarShare Investment Board, which reports to the office of the California State Treasurer, ensuring that seed capital will grow safely.
When the child enrolls in a community or four-year college, or in a technical/vocational program, the state will send the money directly to eligible schools across the country and even abroad for educational expenses. student education, such as tuition, books, computer equipment, supplies, etc. The student must live in California for at least one year immediately preceding a distribution to a post-secondary institution. If the money is not used for college by age 26, the money stays in the fund for others to use.
I encourage you to register for a webinar to learn more about this new program. Earliest dates include: October 6 and 20, 11:00 a.m. to 12:00 p.m. PST. You can register through the CalKIDS website: https://calkids.org/
While there are over a hundred programs nationwide that open long-term savings accounts for children, this one in California will be the largest. As Assembly Budget Chair, it is exciting to think about our investment and the brighter future that the CalKIDS program has the potential to bring. A degree or special vocational training can open many doors, leading to good careers and upward mobility. Additionally, an educated workforce helps the state’s economy thrive.
Phil Ting represents the 19th Assembly District, which includes Westside San Francisco and parts of South San Francisco as well as the communities of Broadmoor, Colma and Daly City.
Posted on September 22, 2022