Live in California? Here's How to Get a Bank Account and More Than $1,000 for Your Kid's Education

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KEY POINTS

  • College costs range from $10,338 to $38,185 on average, as of the most recent academic year.
  • The CalKIDS program can provide up to $1,500 in a college fund for eligible low-income students.
  • All infants born on or after July 1, 2022 will be automatically enrolled, and so will all incoming low-income first graders in fall 2022.

California just became a better place to have kids.

Higher education has become vital to the definition of "success" in the United States, but unfortunately, it is out of reach financially for a lot of people. According to U.S. News & World Report, the average cost of college tuition and fees for academic year 2021–2022 ranged from $10,338 at the low end (for students attending public colleges and universities with in-state tuition) all the way to $38,185 (for those attending private colleges and universities). Wowza.

But California is taking steps to make college more accessible for lower-income kids and families. And since the state has almost 40 million residents, representing 1/8 of the population of this country, the new CalKIDS program is going to have a major impact on higher education. If you live in California and have kids (or plan to), check out how it works and if your family can participate in this special program to help students save money for college.

CalKIDS basics

The CalKIDS program has big goals, with a stated aim to "make the dream of getting a college education a reality for every child in the State of California, especially those from traditionally underserved communities." The program is funded by the state, and is overseen by the ScholarShare Investment Board, a state agency chaired by the State Treasurer. The agency is allowed to accept private donations to support the program, per California law.

Per the program's website, research has shown that kids with savings accounts for education are more likely to go to college (and graduate from college) than those without. So CalKIDS is aiming to provide savings accounts for babies born in California on or after July 1, 2022 as well as eligible low-income public school students in first through 12th grade. The income eligibility requirement is determined by the Local Control Funding Formula, the law that determines school funding within the state.

How does CalKIDS work for newborns?

All eligible kids will receive a seed deposit in an account to help pay for higher education. Babies born on or after July 1, 2022 will receive:

  • A $25 seed deposit in a CalKIDS account.
  • Another $25 deposit when the parents register for the online portal used to access the program.
  • And another $50 deposit when parents link a new or existing ScholarShare 529 college savings account to the CalKIDS account. A 529 plan is a tax-advantaged investment account specifically designed to help Americans pay for college, and California's official 529 plan is easy to open and can easily be linked to CalKIDS for the aforementioned bonus.

The program receives data on eligible newborn participants approximately 90 days after their birth is registered with the state health department, so if you just had a baby in California on or after July 1, check the CalKIDS website beginning in October.

How does CalKIDS work for older children?

If you have a school-age child in California, you can check the website to see if they're eligible by entering their Statewide Student Identifier (SSID), a 10-digit number that can be found on grade transcripts or by contacting the school or school district where your child is enrolled.

Eligible low-income public school students will receive:

  • An automatic $500 seed deposit in a CalKIDS account
  • $500 more for students identified as foster youth
  • $500 more for eligible students identified as unhoused

Beginning in fall 2022, all incoming first graders in low-income public schools will be automatically enrolled in CalKIDS.

The really cool thing about this program is that "no action or financial commitment is required of families to participate." Families are encouraged to contribute to the CalKIDS accounts their children receive so the money will grow and make college easier to pay for, but additional contributions aren't required.

As the cost of education spirals (along with the cost of everything else), it's important to give kids the best chance of financial success possible, and that starts with making sure they can afford to go to college. If you live in California and have children (or plan to), take this opportunity to get them off on the right financial foot.

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