Goal is to ‘bridge the gap between wealth inequality and the high cost of education,’ lawmaker says
California has launched a new state-funded scholarship program to help pay for newborns’ and low-income children’s college tuition in an effort to address “wealth inequality.”
The California Kids Investment and Development Savings Program, or CalKIDS, aims to assist the state’s children in saving up for the cost of college.
Newborns born after June 30, 2022, as well as eligible low-income students, automatically receive “an initial seed deposit” into a college savings account.
The state invested $1.9 billion to launch the program, according to a news release from Gov. Gavin Newsom.
California Assemblymember Adrin Nazarian, a Democrat who helped develop the program, praised it as a way to address “income inequality.”
“My goal with this program was to bridge the gap between wealth inequality and the high cost of education,” he said in the news release.
Newsom’s office and CalKIDS did not respond to The College Fix’s requests for comment.
The taxpayer-funded “seed deposit” is placed in what’s called a “ScholarShare 529 college savings account.” Newborns automatically receive money in their account, administered by a state investment board.
The program’s frequently asked questions page states newborns get $25 to start, plus $25 for families that register on the CalKIDS Parent Portal, and another $50 for linking an existing or new ScholarShare 529 college savings account to their CalKIDS account for a total of $100.
Low-income students in the state can get up to $1,500, it adds.
In addition to the nearly $2 billion in start-up funding, the state may invest up to $186 million annually, Nazarian stated in 2021 as the program was developed.
Critics contend the program is costly.
“State officials say the ‘free’ money is meant to encourage more kids to continue their studies after high school,” according to RealClearPolicy. “That’s a noble goal, but spending taxpayer money to do so, all while keeping tuition rates high, isn’t the way to do it.”
In 2020, over 420,000 babies were born in California, according to March of Dimes. Giving $100 to each child would be $42 million yearly if all parents are actively involved in the program, RCP reported.
There is no citizenship requirement to be involved in the program, the Los Angeles Times reported.
IMAGE: Sheila Fitzgerald / Shutterstock