With among the highest living costs in the country, California recently launched a program to kickstart college savings accounts for millions of children.
The CalKIDS initiative, launched Aug. 10, gives any child born after July 1 of this year up to $100 to start saving for college. Low-income public school students can receive $500, with the state adding another $500 if the child is experiencing homelessness, and an additional $500 if they are in foster care — up to $1,500 total.
State Assemblymember Adrin Nazarian (D), who helped create the program, said it could be a determining factor “between whether or not future generations of kids are able to pursue college.”
According to the Gov. Gavin Newsom’s office, 3.4 million low-income students can receive at least $500.
Parents must register online with CalKIDS to access their child’s account. While families don’t need to contribute to the savings account for their child to be eligible, the money will go further if it’s being regularly added, financial advisor James Simonaro told KSBY 6.
“Let’s say now we start adding to it maybe monthly, let’s say 100 dollars each month with the same five percent annual return,” he explained, “that turns into about $35,000 by the time they’re 18.”
The funds are held in an account that the person can access when they turn 18, and there’s an online portal to choose the college, university or vocational training program where they’ll send the money.
“This is telling every student in California, every low-income student that we think they’re college material and that they should start planning early,” said Ben Chida, chief deputy cabinet secretary for Newsom.