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State to award $100 scholarships to promote higher ed savings

from capitolwire.com

Babies born after Jan. 1, 2019 get a gift from the Commonwealth: a $100 grant to encourage the future student to get a higher education.

Keystone Scholars, state Treasurer Joe Torsella’s signature program, was included in the Fiscal Code legislation as part of the state budget Gov. Tom Wolf signed last week.

The program will earmark $100 for every child born in Pennsylvania after Jan. 1, 2019 in an investment fund to aid future pursuits for higher education.

Families can use this grant to open an individual PA 529 account for their child, in the hopes they would then begin investing themselves and that the child will pursue or education training after high school.

“Families don’t have to put in their own money; we’re sure as heck going to make it as easy as possible for as early as possible,” said Mike Connolly, a spokesman for Torsella.

The funds won’t come out of taxpayers’ pockets, but rather will be through a public-private partnership. Torsella’s office will be responsible for finding philanthropic donors, his office said. At first, the program will rely on investments from the Guaranteed Savings Plan.

“Ideally, we would want to have it be 100 percent from philanthropic funds, but we’ll have to get there,” Connolly added.

If a family doesn’t add to the money in the state’s fund, the investment is expected to total nearly $400 by the time the child reaches age 18. But if a family invests $25 per month from the time they are born, the account would have about $10,000 in savings for college.

The Keystone Scholars grant can be used for high education costs including tuition, fees and books. The funds can be used for a variety of higher education pursuits at four-year, two-year and technical schools.

Torsella and several other legislators pushed this legislation because, they say, it puts the odds in the child’s favor. Research by the Center for Social Development at Washington University in St. Louis found a child whose families began saving for higher education at birth are three times more likely to pursue one and four times more likely to graduate.

Several other states have enacted similar savings programs, but Pennsylvania is the most expansive with 140,000 babies born each year in the Commonwealth, said Sen. John Gordner, a Republican serving several counties including Luzerne. Luzerne County was one of six counties where the program was piloted, where residents have begun to register for the grants. Torsella has already raised $2 million for the pilot program from private donors, his office said.

Gordner said the Keystone Scholars program was his No. 1 priority going into the FY2018-19 budget season. He added that he supported the program because it helps both four-year college students and technical school students.

“College may not be what your career path is, but if you go to a technical school or a business school… to learn a trade, any of those programs are eligible as well,” he said.

As a political science professor at West Chester University, Rep. Duane Milne, R-Chester, who sponsored the original legislation in the House, said he has seen many students face challenges to pay for college.

It can go one of two ways with his students: they work too many hours attempting to leave with less debt, but their academics are hurt or students take out massive amounts of loans that will follow them late into their lives, he added.

“When you’re 18, 19, 20 years old, you just have no concept what it’s going to be like after college,” Milne added. “You just have no concept, understandably, for your choices after college… It can be very constraining to have that debt after college.”

Milne added that he hopes this investment will encourage students to pursue more jobs in public service or human services that don’t have a huge payday.

“It’s telling you from the earliest possible age that your family believes there’s a future for you,” Connolly said. “It doesn’t have to be a PHD…. They are planning for you to have a future outside of your secondary education. That’s what we as a Commonwealth believe. We want to make it as easy as possible for them to understand that we believe they have that potential.”

 

PA Workforce Development Association