A new Nevada pilot program that will set up $50 college savings accounts for kindergartners will launch in 13 of the state’s most rural communities.
Nevada College Kick Start aims to encourage saving for college, with a plan to expand the program statewide.
State Treasurer Kate Marshall pointed to research that found students who knew they had college-savings accounts were seven times more likely to go to college.
“It’s important to note that the studies observed that the conclusions applied regardless of family income, ethnicity, or the educational attainment of the child’s parents,” Marshall said in a press release.
An estimated 3,000 students will receive an account once the program starts in October, according to an Associated Press story. Rural college-enrollment rates nationally lag the national average.
The $50 accounts won’t be paid for with public money; grants, private donations, and management fees the state receives will cover that expense. The accounts are free to students, and parents don’t have to do anything to set them up. Students who don’t enroll in college by age 25 will forfeit their accounts, and they can’t use the money for any other purpose.
Marshall said in the news released that the goal of the savings accounts was to establish college expectations, lower children’s college-savings debt, and lower students’ future loans as much as possible.
Similar programs are starting in San Francisco and Cleveland, according to a Las Vegas Sun story.
Because Nevada wants to encourage parents to open separate college-savings accounts, it also lowered the minimum required amount to open an SSgA Upromise 529 college savings plan from $250 to $15, which is one of the lowest rates in the nation. That plan is available to parents nationwide. The average college debt per college graduate is more than $23,000, according to Nevada officials.
“This is a tremendous plus for many Nevada low-to-middle income families who have struggled mightily over the past several years to plan ahead for their children’s higher education expenses while our economy continues to rebound,” Marshall said in the press release.