How Can a State 529 Matching Program Help Low-Income Families Save for College?
Wednesday, June 5, 2019
Posted by: Lindsay Broderick, Staff Writer
As state legislatures debate policies to help more students get postsecondary education, college savings strategy is a hot topic. States have offered tax-advantaged 529 college savings plans to families for years. Eight states also offer a 529 matching contribution to families of low or moderate incomes to increase their participation.
Nevada’s Silver State Matching Grant Program is one example of such a plan. The program is meant to help low-income families prepare for the financial burden of college. It is open to any family with an adjusted household income of $74,999 or less. Families applying for a matching grant must submit a request for federal tax return return form to verify their income eligibility and must hold an account in Nevada’s SSGA Upromise 529 Plan.
In 2018, 68% of the matching grant participants had an adjusted gross income of $55,000 or less.
The chart below presents the breakdown of applicants by adjusted gross income:
Families can apply for an account for any child who is 13 years of age or younger. An account requires a $15 minimum initial deposit. After the initial deposit, the Silver State Program matches deposits dollar-for-dollar, up to $300 per year and $1,500 in total over the five year span of the program. The program is allocated $100,000 annually to put towards matching grants. Any funds not used in one calendar year roll over to the funding for the following year. Over the last five years, the total annual state match expenditure has ranged from about $84,000 to $107,000, averaging about $95,000.
In 2018, the program provided matching funds to 312 accounts, slightly fewer than the five-year annual average of 346 account matches. Each year, an account receives an average donation of $279 from the family, each dollar matched by the program. As of December 31, 2018, there were 4,848 unique Nevada families saving for college in the SSGA Upromise 529 Plan.
The Nevada Treasurer’s Office spreads the word about the program at school PTA meetings or family nights, union events, booths at community events, and through nonprofit partners such as the Urban League and Youth Outdoor Unity. The office also has partnerships with financial literacy nonprofits, which provide a 211 newsletter and phone line for any questions citizens may have about their personal savings in conjunction with their student’s 529 account.
Learn more about how the college access/success and college savings movements can work together.
(Chart courtesy of the Nevada Treasurer’s Office.)