With bipartisan support, Pennsylvania is launching a statewide policy to provide college savings accounts for all newborns with a $100 scholarship grant.
The universal, automatic-enrollment Child Development Account policy will affect many families: Pennsylvania averages 140,000 births a year.
“The Keystone Scholars program sends a powerful message to every single child that no matter where you live or where you come from, we all believe in you,” said state Treasurer Joe Torsella, who proposed the idea. “We’re willing to invest in your future.”
“This is fantastic news,” said Margaret Clancy, policy director at the Center for Social Development (CSD). She has advised Pennsylvania policymakers on Child Development Accounts and, in particular, Keystone Scholars, which includes the automatic and universal features of the SEED for Oklahoma Kids experiment.
The Keystone Scholars policy starts in 2019 and is for any child who is a Pennsylvania resident at birth or adopted by a Pennsylvania family. Gov. Tom Wolf signed the legislation into law June 22.
The projected cost is $14 million annually for an average of 140,000 births per year, according to the Associated Press.
The $100 scholarship grant will grow through investment and donations. Surpluses in Pennsylvania’s existing college savings program will finance Keystone Scholars. No taxpayer funds will pay for it, Torsella said.
Families have until their child turns 29 years old to use the funds. They may use the scholarship grant – and any additional college savings each family saves by opening a PA 529 account – for any qualified higher education expense at an approved institution of higher education, including trade schools, vocational programs, community colleges and universities in or outside Pennsylvania.
Maine’s Harold Alfond College Challenge was the first statewide, universal Child Development Account in the nation, with the program now automatically depositing $500 into a 529 account on behalf of every child born in Maine. The Nevada College Kick Start program automatically deposits $50 into a 529 account for every public school kindergartner in the state.
Clancy also advised those states’ officials, pointing to evidence from CSD’s long-running SEED for Oklahoma Kids experiment.