Proposal calls for state to seed college savings accounts
Concord rep’s plan would provide $200 to New Hampshire children
How about giving every kid born in New Hampshire, or one enrolling in kindergarten, a couple of hundred dollars to go to college?
That’s what Rep. Mary Stuart Giles, D-Concord, would like to do: seed a savings account that would be earmarked for education at an early age, both to teach financial literacy and to get students to set their sights on higher education by providing a vehicle to save for it from the get-go.
“Even if they only end up saving $500, studies show that the portion of students who go on to higher education is way beyond those that have nothing,” she said.
Details and the wording of the bill haven’t been worked out as of deadline, but Giles said she is proposing that the state chip in $200. The money could go into a tax-protected 529 college savings plan or a simple savings account. It would not be able to used for any other reason, until the age of 25, in which case it would simply be turned over to the holder of the account.
More kids going to college will mean a better-educated population and a better local workforce able to adopt to future changes in technology, Giles said. And it would mean people would be more savvy about money.
“Look, you could give a couple of workshops on financial literacy to encourage that, but having kids with their own accounts will be much more meaningful,” Giles said.
Such proposals, being considered in states across the nation, particularly in New England, where the Federal Reserve Bank of Boston has set up a Children’s Savings Account Consortium to encourage a “highly promising tool in improving the economic strength of lower-income people and communities in New England.”
The amount to seed – and where that money should come from – differs widely from state to state. Vermont considered such a bill last year, and Maine has one funded through private donations, called the Next Gen account. In addition, Massachusetts has started a pilot program in Worcester.