Score Big with College Savings
By State Treasurer John Chiang
Making it to the big leagues of college can be like hitting a homerun for some, but for many Californians it’s curveball after curveball when it comes to paying tuition.
After college, there’s all too often a mountain of student debt to face — just when a young person is starting out on the path to building a career and possibly thinking of starting a family.
How to pay for the steadily increasing cost of attending college is a difficult question to solve.
But young people whose families start saving early through the state’s ScholarShare 529 plan overseen by my office begin with an advantage.
ScholarShare 529 is a nationally recognized and popular tax-advantaged college savings program that encourages families and friends to save for a young person’s future education.
ScholarShare 529 accounts have been found to increase educational opportunities by reducing the financial barriers many students face to attend college. And according to multiple studies, a college savings plan also increases the likelihood of completing college.
Whole communities are now beginning to take note.
Working with my office and ScholarShare 529, West Sacramento Mayor Christopher Cabaldon and Washington Unified School District Board President Norma Alcala launched a new leg of an innovative program this past month: the Home Run Initiative’s College Savings Account Program. The goal is to create a college bound culture in West Sacramento and increase college graduation rates.
Qualified families who are a part of the West Sacramento Home Run Initiative will receive $50 from the city and a matching $50 contribution from ScholarShare 529 to be deposited into a ScholarShare 529 account that will build up savings as families continue to save over time.
West Sacramento Mayor Cabaldon says the contributions to the college savings are a significant part of the West Sacramento Home Run Initiative, which aims to ensure that every young person in the community enrolls in and completes college.
And I wholeheartedly agree. There’s nothing we can do that will make as much of a difference in the lives of our young people as much as giving them access to an affordable college education.
My family came to this country to get a higher education, and the education I received is why I am where I am today. The California dream is rooted in ordinary people ignoring and then rising above the conventional expectations thrust upon them by others.
Our partners in West Sacramento understand there are very few things that can be done to breathe powerful meaning into that golden dream than to make a college degree or trade certificate more accessible.
For its sustained economic and social prosperity, California should invest in its future by opening and seeding a college savings account for every newborn. Our young people are California’s next innovators, entrepreneurs, and leaders. Providing them with an outstanding education, without saddling them with debt, is one of the best investments we can make as a state and as a country.
Under this new leg of the Home Run Initiative, eligible students will have a ScholarShare 529 account opened in their name if:
1) They live in West Sacramento,
2) Have completed a high-quality Home Run-certified preschool, and
3) Are enrolled in kindergarten at one of seven elementary schools in the Washington Unified School District.
The matching contributions to the college savings plan are just one piece of the city’s ambitious Home Run Initiative. The West Sacramento program also provides paid internships, online learning opportunities, and two semesters of fee-free college tuition for West Sacramento youth. To date, the Home Run Initiative has provided high-quality preschool education to 672 preschool-aged youth, 58 paid internships with local employers to high school students, and ensured 230 high school graduates can attend college with fee-free tuition.
ScholarShare 529 has a proven track record of success and a strong track record on investment returns. California’s state-sponsored 529 since 1999, it has grown to nearly $8.6 billion dollars with nearly 310,000 active accounts.
The plan was recently ranked number one in the nation for investment performance, among all direct-sold 529 plans, based on a three-year and five-year investment period ending June 30, 2018, according to Savingforcollege.com.
You don’t have to live in West Sacramento to take advantage of ScholarShare 529, of course.
Getting started is simple, affordable, and stress-free. Parents can open a ScholarShare 529 account online in just 15 minutes — and with as little as a $25 contribution. All earnings are tax-free when used for qualified higher education expenses, which include tuition, room and board, computers, books, and other required supplies. ScholarShare 529 even allows grandparents, other family and friends, and even employers to make gifts to a student’s account for maximum growth potential.
There is a growing body of research linking early college savings with college success. Some studies have found that students with even small savings accounts of $500 or less are more likely to attend and complete college than those without savings. Don’t let college find your child in the dugout. Pitch them a homerun with ScholarShare 529!
To open a ScholarShare 529 account or to get more information about the plan, visit www.ScholarShare529.com. For information about the ScholarShare Investment Board, visit www.treasurer.ca.gov/scholarshare, like ScholarShare 529 on Facebook at www.facebook.com/scholarshare529, and follow them on Twitter at @ScholarShare529.
The following article is based on remarks delivered by California State Treasurer John Chiang. To learn more about ScholarShare 529 and the Home Run Initiative click here .