SALEM— With increased investments in Oregon’s education system through the Student Success Act and local bond measures across the state, legislators and public officials are working to boost education outcomes. State agencies play a role in helping student success, and a new program through the Oregon State Treasury Office just started its roll-out: the Kinder Grad Program.
The Oregon College Savings Plan is a state-sponsored plan that provides a tax-friendly and tax-deductible college savings account for families. The new Kinder Grad program’s perk, The Oregon College Savings Plan, will pitch in $25 to every new account opened for an eligible kindergartener this year.
“The cost of education and training after high school continues to rise and so does student debt. We are committed to making sure Oregon families have the tools they need to be prepared with the Oregon College Savings Plan,” says Oregon’s State Treasurer Tobias Read.
“We want to make it as easy as possible for families to start saving for their kid’s future early on. When they do, they’ll be better able to meet their educational goals with less debt. Remember, the sooner families start saving for a child’s education, the more time interest can grow their accounts. We will continue working to build awareness of college saving opportunities across the state. We’re working especially hard to connect with underserved communities and reiterating that College Savings Accounts work for community colleges, and trade schools, as well as universities,” he says.
Increasing student success requires utilizing data-driven policy. The Kinder Grad program is designed on the premise that students who have college savings are not only more likely to attend college, but also more likely to graduate. A study by Brown University’s Center for Social Development found that low- to moderate-income students with under $500 saved for college are 3 times more likely to go to college and 4.5 times more likely to graduate from college.
“Having a college savings account tells kids, from the very start of their education, that someone believes in them,” says Treasurer Read.
Kinder Grad builds off of another college savings incentive program designed to help parents get a head start on saving for their child’s education.
To be eligible for the Kinder Grad program, an account must be opened during 2019-2020 year for a kindergartener who was five or six years old when the account was established. Saving with an Oregon College Savings Plan has other benefits too; the 529 plan comes with special tax advantages, and the money saved grows tax-free.
When it comes time for the child to go to college, money saved can be used on a wide variety of qualified expenses ranging from tuition to computers and other school supplies. When FAFSA or other scholarships may not cover the full cost of post-secondary education, a college savings plan helps fill in the gap for those in financial need.
The Oregon College Savings Plan’s Kinder Grad program follows the Baby Grad program, which also contributes $25 to any account on behalf of a baby under one year old. For both Kinder Grad and Baby Grad, the $25 contribution from the state is automatic and occurs within the first three months of the account being opened.
“The success of Baby Grad saw more than 3,600 accounts opened, and close to $12 million saved in just two years. These are meaningful dollars saved by families for college, dollars that will not have to be borrowed and paid back right when graduates are getting started in a new career,” says Treasurer Read.
States across the country are starting to enact smart policies to entice families to think about and take action on saving for their child’s future education. Nevada’s College Kick Start Program launched in the fall of 2013 and contributes $50 to establish a college savings account for all public-school kindergarten students. In January of this year, Nevada’s plan had more than 170,000 people enrolled. Earlier this year, the Colorado Legislature passed House Bill 19-1280, which creates the College Kickstarter Account Program. The program sets aside $100 for all children born or adopted between 2020 and 2040.
Treasurer Read emphasizes the need for states to encourage families to start thinking about their child’s future education, “States can and should make it easier for everyone to save for education and training after high school. That’s especially true among low- and moderate-income families that may need help to get started saving.”
“We have found that even a small $25 incentive nudges families to start saving for higher education. When more kids are able to meet their educational goals with less student loan debt, that’s good for everyone. Investing in our children sends a strong message: You are capable. You are worthy. And we believe in you!”
To read more about the Kinder Grad program terms and conditions, visit the Oregon College Savings Plan’s website for more information. The program began on August 1, 2019, and will be open to qualifying individuals until December 31, 2020.