*California parents from low-income households can now get free cash for college via the state’s CalKIDS program.
The scholarship program is tax-payer funded and grants up to $100 to every child born in California on or after July 1 and up to $1,500 to every eligible low-income student, the Los Angels Times reports. The goal of the initiative is to encourage kids to pursue higher education after high school.
“Research demonstrates that children with a college savings account are three times more likely to enroll in college and nearly four times more likely to graduate than children with no savings,” the CalKIDS program information guide states. “The investments provided in a CalKIDS account can be a steppingstone to building a new savings behavior for families and serve as a tangible demonstration of the state’s commitment to supporting children in reaching the goal of higher education.”
A news release provided by the officer of California Governor Gavin Newsome notes that the CalKIDS program, “invests $1.9 billion into accounts for low-income school-age children in grades 1-12 and for newborn children born on or after July 1, 2022.”
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CalKIDS is the long-awaited children’s savings account program that offers newborns & eligible low-income public school students in CA between $25 & $1,500 to start saving for college & career training. Visit https://t.co/22a7idttUF to learn more & get started on your savings! pic.twitter.com/Onle1AJeXR
— Santa Monica College (@SMC_edu) August 11, 2022
“California is telling our students that we believe they’re college material – not only do we believe it, we’ll invest in them directly,” said Governor Newsom. “With up to $1,500, we’re transforming lives, generating college-going mindsets, and creating generational wealth for millions of Californians.”
Here’s more from the LA Times:
The tax-free money is invested in a mutual fund managed by ScholarShare, the state’s college savings plan, and can be spent on tuition, books and other education-related expenses. Withdrawals for other purposes would be subject to taxes.
Just to be clear, CalKIDS says it is a scholarship program, and unlike 529 savings plans that help parents and students to set aside money for college, you can’t add money to your child’s CalKIDS account. For that, you’ll need a 529.
“I am proud and excited to finally see CalKIDS in action,” said Assemblymember Adrin Nazarian in a statement via Newsome’s news release.
“My goal with this program was to bridge the gap between wealth inequality and the high cost of education. CalKIDS will expand access to college through savings by providing each child born in the state of California a seed deposit in a ScholarShare 529 college savings account” Nazarian added.
“Furthermore, thanks to Governor Newsom’s investment and expansion of the Program to make college more accessible to low-income California kids, additional deposits will be made for low-income first graders across the state, with supplemental deposits for foster and homeless youth. Our shared vision ensures each child across the state will have an opportunity at higher education,” said Nazarian, per the governor’s news release.
To learn about who is eligible and how the program works, read more here.
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