INCENTIVES FOR COLLEGE SAVINGS
Five states enacted or implemented policies related to incentives for college savings in the period between February 2007 and July 2008. Four other states introduced legislation that would have created endowed accounts at birth and/or matching grant programs for 529 college savings plans. Particularly noteworthy among the states that implemented policies incentivizing college savings was North Dakota, which established a statewide matching grant program for its 529 college savings plan. Arkansas also created a two-year pilot 529 matching grant program. Maine made headlines in December 2007, when it announced a public-private partnership between the state and the Harold Alfond Foundation, which committed to providing $500 vouchers for the state’s 529 plan to every child born in the state.
The table below provides details on those states that enacted or introduced legislation or implemented policies related to incentives for college savings between February 1, 2007, and July 1, 2008.
| State | Policy
Action since February 2007 |
Description | |
| Alabama |  |
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| Alaska | |
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| Arizona | |
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| Arkansas | |
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Arkansas enacted legislation (SB 822) in March 2007 establishing a two-year pilot matching grant program for the state's 529 college savings plan; the pilot launched in January 2008. |
| California | |
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California introduced two bills in February 2007 related to incentives for college savings. SB 752 would have established Kids Investment and Development Savings (KIDS) Accounts for every child born in the state, with a $500 initial deposit by the state and eligible uses limited to post-secondary education and training, first home purchase, or retirement. SB 643 would have provided a one-time matching contribution of $50 to any 529 college savings plan established for a child born in the state, and would have authorized a tax deduction for contributions toward the 529 account. Both bills died in committee. |
| Colorado |  |
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| Connecticut | |
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| Delaware | |
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| District of Columbia | |
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| Florida | |
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| Georgia | |
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| Hawaii | |
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In January 2007, the Hawaii Senate introduced a bill (SB 1936) that would have provided every child born in Hawaii with a $1,000 voucher to be deposited in a Hawaii 529 account, along with additional "periodic investments." The bill died in committee. In May 2007, Hawaii introduced legislation (HCR 78) that would have established a time-limited children's savings account task force, but it did not pass before the close of the legislative session. |
| Idaho | |
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| Illinois | |
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Illinois enacted the Illinois Children's Savings Account Act (HB 1662) in August 2007, establishing a task force to make recommendations about Children's Savings Account program options. The Task Force will present a written report to the Governor and General Assembly by November 2008. |
| Indiana | |
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| Iowa | |
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| Kansas | |
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| Kentucky | |
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| Louisiana | |
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| Maine | |
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In 2007, Maine implemented a $250 state tax deduction for contributions to the state's 529 college savings plan. To claim the deduction, families must have incomes at or below $100,000 single/$200,000 married. In December 2007, the Harold Alfond Foundation also announced the Alfond College Challenge, which will provide a $500 grant to be invested in a NextGen Account for all Maine newborns. The initiative will be taken statewide by January 2009. |
| Maryland | |
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| Massachusetts | |
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| Michigan |  |
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| Minnesota | |
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| Mississippi | |
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| Missouri | |
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Missouri introduced legislation (SB 254) in 2007 to establish the Legacy Initiative, which would have provided matching grants to low- and moderate-income Missouri families that invest in the state's 529 college savings plan. The proposal called for the use of excess funds from the state's unclaimed property funds account to fund the matching grants. The bill passed out of the Senate Education Committee but subsequently stalled. |
| Montana | |
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| Nebraska | |
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| Nevada | |
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| New Hampshire | |
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| New Jersey | |
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| New Mexico | |
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| New York | |
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| North Carolina | |
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| North Dakota | |
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As of July 1, 2007, North Dakota offers a one-time 1:1 match (up to $300) for contributions made by low-income families to a College SAVE 529 account during the year they open the account. The state also passed legislation (HB 1091) creating a tax deduction for in-state contributions to the state's 529 college savings plan. |
| Ohio | |
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| Oklahoma | |
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Oklahoma re-introduced the BEEACON Act (HB 2988) in 2008. The legislation, which died in committee, would have provided all children born in OK with a $200 initial deposit into the state's 529 plan and matching funds up to $100 per year, with a maximum match of $500. |
| Oregon | |
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| Pennsylvania | |
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| Rhode Island |  |
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| South Carolina | |
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| South Dakota | |
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| Tennessee | |
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| Texas | |
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Texas enacted legislation (HB 3900) in June 2007 to revive the state's prepaid tuition plan, the Texas Tomorrow Fund II (TTF II). The legislation also creates a mechanism, called Save and Match, to match contributions to TTF II by families with incomes below the state median household income. However, the state did not fund the Save and Match program. |
| Utah | |
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| Vermont | |
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| Virginia | |
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| Washington | |
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| West Virginia | |
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| Wisconsin | |
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| Wyoming | |
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Source: CFED and the Center for Social Development.