To View Data:

Select a State Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming United States

Select an Issue Area Financial Assets & Income Businesses & Jobs Housing & Homeownership Health Care Education Community Investment

College Savings Incentives

Priority Policy Overview

Post-secondary education is one of the best investments an individual can make in his or her economic future. Yet escalating costs discourage many from pursing higher education. One way to make the cost of post-secondary education more affordable and increase participation by lower-income individuals is to create incentives for families to save for college. States should create programs to incentivize deposits into 529 college savings accounts.

For more information, see the College Savings Incentives Policy Brief or the College Savings Incentives Resource Guide.

ELEMENTS OF A STRONG POLICY
Based on research by CFED, the Center for Social Development, the New America Foundation and others, CFED considers a state's college savings incentive policy strong if it meets the following criteria:

1. Are accounts automatically opened for all children at birth? States should automatically enroll all newborns into its 529 college savings plan.
2. Does the state incentivize 529 college savings for low- to moderate-income residents or all residents? States should provide a match or tax credit on college savings for as many children as possible, but at least for children in families with low and moderate incomes.
3. Is there potential for meaningful account balances after 18 years? States should design incentives so they result in meaningful savings by the time many young adults are ready for post-secondary education. Even with the assumption that college costs will increase rapidly – 5% per year for the next 18 years, or 90% more than present costs – savings accumulations of $6,000 would pay for at least one year of a child's net costs at a four-year public university.¹ Therefore, for the purposes of this policy measure, an account balance of at least $6,000 at age 18 is considered "meaningful."
   
   The potential for a meaningful account balance after 18 years is influenced by whether a state makes an initial deposit to seed the account, the amount of that deposit and the structure of state matches or tax credits for individuals' deposits. The presence of a state match or tax credit and its rate and duration will greatly impact the final balance for an account.
4. Does the state minimize barriers to saving? States should ensure that saving is as easy as possible, and that accountholders' investments are not whittled away by high fees and service charges. To do so, states should ensure that:
• Small deposits are permitted. Many 529 programs have a minimum deposit requirement (often in the $15 to $25 range), which can be a barrier for very low-income families who may only have a few dollars at a time to deposit. States should allow deposits of any size to 529 accounts, no matter how small.
• The 529 plan offers a no-cost investment option. States should minimize fees and service charges in their 529 plans, and should offer a basic investment option with no fees for enrollment, account maintenance, program management or other investment costs.

---

POLICY RATINGS

For information on the Scorecard's policy rating methodology, click here.

Status of State College Saving Incentives

State	Savings Incentivized for Some or All Residents?1	Automatic Enrollment for All?1	Account Balance At 18 ≥ $6,000?2	Barriers to Saving Minimized?3	Rating
Alabama	No
Alaska	No
Arizona	No
Arkansas	Yes	No	$6,191	No
California	No
Colorado	Yes	No	$5,894	No
Connecticut	No
Delaware	No
District of Columbia	No
Florida	No
Georgia	No
Hawaii	No
Idaho	No
Illinois	No
Indiana	Yes	No	$11,145	No
Iowa	No
Kansas	Yes	No	$18,591	No
Kentucky	No
Louisiana	Yes	No	$10,419	No
Maine	Yes	No	$14,295	No
Maryland	No
Massachusetts	No
Michigan	Yes	No	$873	No
Minnesota	Yes	No	$10,700	No
Mississippi	No
Missouri	No
Montana	No
Nebraska	No
Nevada	No
New Hampshire	No
New Jersey	No
New Mexico	No
New York	No
North Carolina	No
North Dakota	Yes	No	$2,889	No
Ohio	No
Oklahoma	No
Oregon	No
Pennsylvania	No
Rhode Island	Yes	No	$9,286	No
South Carolina	No
South Dakota	No
Tennessee	No
Texas	No
Utah	Yes	No	$12,275	Yes
Vermont	Yes	No	$10,232	No
Virginia	No
Washington	No
West Virginia	No
Wisconsin	No
Wyoming	No