Bailee Moore, center, and classmates work on a computer math exercise in Becky Montgomery’s second grade class at Highland Elementary School in Salem Wednesday March 13, 2019. (Fred Joe/Special to Salem Reporter)
Have a kindergartener in your life? Oregon wants to give you $25 to start saving for their college education.
The Oregon State Treasury on Thursday announced a new program called Kinder Grad to encourage new Oregon College Savings Plan accounts.
Treasurer Tobias Read wants parents, grandparents and other loved ones to start thinking about education after high school early in a child’s life.
“Nothing (is) better than being able to say to every kid in the state that they’re capable and worthy,” Read said.
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Oregon’s college accounts are 529 savings accounts, a special type for higher education expenses with federal and state tax benefits.
“The really powerful part is the mindset that changes as a result. A kid who knows there’s an account in their name is more likely to think about what comes after high school,” Read said. “Even if it’s just a little bit of money … knowing that someone has expectations for them is important.”
Last year, Read’s office started an incentive program called Baby Grad, rewarding anyone opening an account for an infant under 1 with $25.
Some 3,600 Oregonians opened accounts under that program, and the state chipped in $90,000 to support them, said David Bell, deputy director of the Oregon Savings Plan, which administers the program.
The total value of those accounts is now nearly $12 million, with an average of $3,300 per account.
With an initial state contribution of $25, “people were adding much, much more to those accounts,” Bell said.
The success of that program spurred the idea for Kinder Grad.
“Kindergarten is another real milestone in people’s lives. We wanted to capture that momentum as well,” Read said.
The incentives are funded by a small fee charged on account assets and cost taxpayers nothing, Read said.
Funds in an account can be invested, and earnings from investments aren’t subject to capital gains tax. Contributions also earn account holders a tax deduction in Oregon. Starting in 2020, that deduction will become a credit, meaning those who save could earn a higher refund.
The money can be used for any educational expenses after high school, including community college and trade schools. Students can buy materials with them, like books or knives for culinary school.
The Salem-Keizer School District is working with the treasury to send information to all kindergarten families about the program and is considering using college savings plan gift cards as an incentive for student attendance, spokeswoman Lillian Govus said.
Reporter Rachel Alexander: [email protected] or 503-575-1241.
Correction: This article misspelled Treasurer Tobias Read’s name.
Rachel Alexander is Salem Reporter’s managing editor. She joined Salem Reporter when it was founded in 2018 and covers city news, education, nonprofits and a little bit of everything else. She’s been a journalist in Oregon and Washington for a decade. Outside of work, she’s a skater and board member with Salem’s Cherry City Roller Derby and can often be found with her nose buried in a book.
