OLYMPIA, Wash. – House Bill 2662 would set up a universal children’s savings account, or CSA, for every newborn or adopted child in Washington.
The bill’s sponsor, Rep. Christine Kilduff (D-University Place), says the 529 college savings plans’ funds would not come from state money, but instead from the private donations of business and philanthropy.
If passed, every newborn or adopted child would get $250. Low income families could apply for a total of $529. The state lawmaker behind the bill says this plan is completely different and would be run separately from GET, the state’s beleaguered prepaid tuition program.
Maine has a similar universal CSA system, but instead children there get $500 because of a $100 million gift from the Alfond foundation.
University of Kansas research shows low and moderate income students with CSA accounts are three times more likely to attend college than those without one.
Other smaller scale CSA plans have sprung up in our state. Last fall, the Tacoma Housing Authority (THA) launched the “Children’s Savings Accounts for the Children of Salishan.” The pilot program gave CSAs to 50 kindergartners and sixth graders.
THA will remain the account custodian and make the first $50 deposit. While the child is in elementary school, THA says it will match the family’s deposit up to $400 per year.
Starting in the sixth grade, the matching stops. At that point, a counselor devises milestones (for example, improved grades, etc.) and the student must accomplish these to get up to $700 per year.
The housing authority says its contributions will only be available after the student graduates from high school. Any unused funds will be recycled back into the system.
“A lot of children and their parents make the judgment early on that college is not for them. That it’s not attainable, it’s not affordable – and these accounts have the effect of helping them rethink,” said THA executive director Michael Mirra. “It gets the child and the child’s parents starting young thinking more positively about the future. The main enemy here is despair.”