Our office recently received a letter from California State Treasurer Fiona Ma, notifying us about an opportunity for income qualifying families to help get a jump start on their children's college savings accounts. The cost of higher education continues to rise and we recognize this represents a major hurdle for many families.
We are in full support of helping low to moderate income households create opportunities for their children. Although a degree is no guarantee of financial success in life, it's a good start. According to the US Bureau of Labor and Statistics in a 2017 study, the median weekly income for some one with only a high school diploma was $712, while the median weekly income for those with a bachelor's degree was $1,173. That's almost a 65% increase in weekly income!
Starting a college savings account for your kids is also a good step towards avoiding excessive student loan debt in their future. Too many college graduates are coming out of school with mountains of debt which is outpacing growth in wages. While Butte CAA is not officially affiliated with ScholarShare 529, we feel that this state sponsored program aligns with our continued mission to help people and change lives. You can read more about the program below, or on their website at ScholarShare529.com/mgp.
ScholarShare 529 The official 529 College Savings Plan of CA
The ScholarShare 529 2019 Matching Grant Program offers eligible families a dollar-for-dollar match in contributions of up to $200 to those who apply and open new accounts. Plus, families who establish a monthly automatic contribution plan of $25 or more when opening an account will receive another $25! These funds grow 100% tax-free and can be used at any accredited higher education program, including community colleges and trade schools. To be eligible, participants must be California residents, be the parent or legal guardian of the beneficiary, have valid Social Security Numbers or Federal Tax Identification Numbers, and earn $75,000 annually or less. The beneficiary of the account must be 14 years of age or younger.
Research has established a strong correlation between child savings accounts and greater educational and economic opportunity. The ScholarShare 529 2019 Matching Grant Program was created to help families jump-start good savings practices.
ScholarShare 529 is administered by the ScholarShare Investment Board, which is chaired by California State Treasurer Fiona Ma. To learn more about the ScholarShare 529 2019 Matching Grant Program, visit ScholarShare529.com/mgp.
To learn more about the California 529 College Savings Plan, its investment objectives, tax benefits, risks, and costs, please see the Disclosure Booklet at ScholarShare529.com. Read it carefully. Check with your home state to learn if it offers tax or other benefits such as financial aid, scholarship funds or protection from creditors for investing in its own 529 plan. Consult your legal or tax professional for tax advice, including the impact of the new federal tax changes. Investments in the Plan are neither insured nor guaranteed and there is the risk of investment loss. If the funds aren't used for qualified higher education expenses, a 10% penalty tax on earnings (as well as federal and state income taxes) may apply. Non-qualified withdrawals may also be subject to an additional 2.5% California tax on earnings. TIAA-CREF Individual & Institutional Services, LLC, Member FINRA and SIPC, distributor and underwriter for the California 529 College Savings Plan.
We encourage all eligible families to look into the ScholarShare 529 program. It’s the perfect opportunity to begin your child’s journey to a higher education, which remains one of the single greatest factors in their future success and upward mobility. The Community Action Agency of Butte County is not affiliated with the ScholarShare 529 program.
Since 1967, the Community Action Agency of Butte County has been serving the needs of the region in alignment with the charter of the National Community Action Agencies overarching goal: To alleviate the causes and conditions of poverty by whatever means necessary in your community. As Butte County CAA, we provide hope to people struggling with poverty to become more self-sustaining by meeting tangible needs in the areas of energy savings, affordable food, and housing. Connect with us to find out how you can get involved.