New state law helps children save for college.
New state law helps children save for college.
A new state law will be helping children get a head start in their college education, but questions over funding abound.
According to WTHR, beginning on Jan. 1, 2021, all children born in or adopted in the state of Illinois will be given $50 that will be deposited into their college savings plan as part of the new Illinois High Education Program.
The $50 deposit is said to help with the ever-rising costs of attending college which is currently estimated to be 5% to 6% each year.
In addition to starting off their savings accounts early, these children, state legislators believe, will also learn the benefits of starting to save for college at birth.
Rep. Michael Halpin (D-72nd) said that this simple investment in the future of Illinois could have massive and positive impacts in the long run.
“Research shows if you have one of these college savings accounts, a child is much more likely to attend college just by having the account in the first place,” Halpin told WTHR.
Rep. Tony McCombie (R-71st) fears that for all of its good intentions, this new law might just be yet another leach on Illinois taxpayers.
“It’s just a feel-good bill that was passed,” McCombie told WTHR. “It is another one of those bills that is subject to appropriation, there is no funding put into the budget.”
Keeping the program up and running will cost $1.5 million per year, with an $8 million start-up cost in its first year.
Other skeptics of the program include Quad City Investment Advisor Mark Grywacheski, who said that the $50 investment at birth will not result in much savings by the time the children are of college age.
“If the state of Illinois was really serious about college education, it would restructure the out-of-control cost structure,” Grywacheski told WTHR.
It is likely, Grywacheski said, that the investment will only be a few hundred dollars by the time of the students’ enrollment in college.
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