CALIFORNIA, USA — In 2022, California launched a program offering newborns and eligible children free money to save for college. We're almost three years in and millions of dollars have yet to be claimed.
CalKIDS is a college savings account program fully funded by the state. All Californians born in the state on or after July 1, 2022, have automatic access to up to $175.
Low-income public school students can receive $500; if they are foster youth, they can receive $500 more; if they are homeless, they can receive an additional $500 for a total of $1,500.
A study from the University of Washington in St. Louis found moderate to low-income students with $500 or more in a college savings account are 4x more likely to enroll in college than those without savings accounts. The same students are 5x more likely to graduate from college.
The program has struggled to get accounts claimed by eligible families.
According to Dana Salas, an outreach specialist with CalKids, about 4 million accounts have been created since the program began but only around 450,000 accounts have been claimed, meaning millions of dollars are still on the table for Californians.
Salas says the biggest struggle is getting the word out about the free money for the low amount of claimed accounts.
How to claim the funds
Parents/students can use CalKids’ Eligibility Tool to see if they qualify for the savings account
Eligible Newborns:
All newborns born in California on or after July 2022 are eligible for the savings account. The accounts are automatically created by CalKIDS using birth registration information from the California Department of Public Health.
Eligible Students:
Current students enrolled in first through 12th grade during the 2021-2022 school year or in the first grade during the 2022-2023 school year and every year after are eligible to receive free money.
To be eligible, students must have been enrolled on the first Wednesday of October of the academic year known as “Fall Census Day."
Students must be identified as English Learners or low-income by the Local Control Funding Formula.
While funds can’t be directly added to the CalKIDS account, parents can link the savings account to a ScholarShare 529 account.
What can the funds be used for?
The funds must go toward higher education or vocational training. Expenses such as tuition, room and board, books, computer equipment and apprenticeship training are all covered.
Students need to be at least 17-years-old to use the money and need to submit a request for distribution. All money distributed is tax-free.
What happens to unused funds?
Students need to use all their CalKIDS savings before they turn 26. Any unused funds will be redirected back to the state. People can submit an appeal to gain access after they age out.
Anyone interested in applying for a CalKids account can do so on their website.
