CSAs in California Receive Hearty Seed Deposit Increase

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Earlier this summer, California Governor Gavin Newsom signed AB 132, legislation that included huge policy wins for children’s savings accounts (CSAs).

AB 132 will implement significant investments in college affordability and access, including an expansion of the California Kids Investment and Development Savings Program (CalKIDS), which will now provide “$500 base deposits to seed college savings accounts for public school students from low-income families, English learners and foster youth, with supplemental deposits for foster youth and homeless students.”

CalKIDS, a program housed in the California State Treasurer’s office, was originally enacted in California’s 2019-20 State Budget. The new base deposit of $500 is a hearty increase from the previous $25 seed deposit, or 20 times the original deposit amount.

ScholarShare 529, California’s state 529 investment plan, will be tasked with managing the savings in tax-advantaged investments.

Gov. Newsom’s investment in the country’s largest higher education system by way of CSAs is commendable. California’s new CSA investment also tracks for the progress that CSAs are making at large in the United States. As of 2020, there are 109 active CSA programs across 36 states and Washington, D.C.

More generally, CSAs are savings accounts meant to pay for a student’s higher education pursuits after age 18. A handful of states, including Oklahoma, Pennsylvania, Illinois, and Nebraska, have statewide CSA policies, which are delivered at scale, meaning all newborns automatically receive the benefit.

Read More:

• What is a CSA?
  
• 'Sustaining the Movement:' CSA Programs Show Promising Growth in 2020
• 6 Reasons to Unite Child Savings Accounts and College Access-Success Programs

(Photo by Jerry Wang on Unsplash)