Governor Peter Shumlin, House Speaker Shap Smith, Representative Jill Krowinski, the president of the Vermont Student Assistance Corporation (VSAC), and other supporters today called for the creation of child savings accounts to give every child born in Vermont a head start on saving for higher education and boost the number of Vermont kids who move beyond high school.
“Vermont has one of the best high school graduation rates in America,” Shumlin said. “But we need to do more to move kids beyond high school so they are prepared for the jobs of their future. These accounts will help us do that and give students and families much-needed financial assistance as they work to pay for higher education.”
According to the Center for Enterprise Development, child savings accounts can help boost expectations of college entry among children and parents and increase high school GPAs. Kids with a savings account also are three times more likely to enter college and four times more likely to graduate.
Maine has a program to establish child savings accounts for higher education and job training for every child born in the state.Legislation introduced by Rep. Krowinski proposes a similar program for Vermont to be administered by VSAC.Under the proposal, which is making its way through the legislature now, VSAC would establish savings accounts for children born in Vermont. The accounts would receive seed funding from participating private foundations and partners.Matching provisions and other incentives to increase savings also could be employed,and the accounts could be used by the child's family to increase savings over time.Just as in the recently-established program in Maine, the Vermont proposal pending in the legislature would not rely upon anystate funding.
"Universal savings accounts for college is one strategy we can use to knock down barriers to higher education and help end generation poverty, by starting on day one," said Rep. Krowinski. "This proposal creates a college savings account for every child, a seed and match component, and has a financial literacy program that follows the child and family through the duration of the program. Every child in Vermont deserves an equal chance and access to higher education, no matter what."
"The initiative announced today represents a commitment to the future of Vermont," noted House Speaker Shap Smith. "I am optimistic that this partnership will help more Vermonters reach their goal of higher education, and a satisfying career."
Under the initial legislative proposal, Vermont kids would be able to withdraw funds once they turn 18 or enroll full-time in post-secondary education, including a college, university, vocational school, or any two or four-year degree program from an accredited educational institution. The money could be used only for qualifying post-secondary education expenses, including tuition, mandatory fees, books, supplies, or other necessary costs of attending school, helping working families and young Vermonters obtain much-needed resources to afford education beyond high school.
“Only 27 percent of parents in Vermont have set aside funds for their child’s college education,” said Scott Giles, president and CEO of Vermont Student Assistance Corp. “But research shows that children from low- and moderate-income families with college savings of as little as $500 are three times more likely to attend college and four times more likely to graduate than similar students with no college savings.”
Governor Shumlin praised legislators, VSAC, and other supporters for calling for this program, and urged the legislature to advance the bill this session.
Source: Gvoernor's office 3.26.2015