Starting Jan. 1, 2020, every child born or adopted as a Massachusetts resident will be eligible for a free $50 deposit into a college savings account, according to the State House News Service.
According to Treasurer Deborah Goldberg, the deposit will be made through the Massachusetts Educational Financing Authority (MEFA) and financed by a state Treasury trust fund she oversees, with support from private donors. One of those donors, Inversant founder Robert Hildreth, joined Goldberg and Boston Mayor Martin Walsh at a press conference as Hildreth committed $300,000 to SeedMA Baby, the news service reported.
“This program is designed to empower families from Boston to the Berkshires, all over the state, to save for their child’s higher education,” Goldberg said. “With the price of education increasing each year, we must ensure that individuals of every background and income level are equipped with the resources to finance their higher education and enter the workforce debt-free.”
Goldberg’s office said that there are an estimated 70,000 births in Massachusetts every year. About $3.5 million would be required if 70,000 children were signed up, but Treasury officials say only 10 percent are expected to actually sign up for the $50 deposit in the first year.
The deposit would go into a 529 college savings account through MEFA, a tax-advantaged plan designed to encourage savings for higher education. The accounts provided by the program will come from MEFA’s UFund, which is sponsored by state government and managed by Fidelity Investments.
Fifty dollars will make a tiny dent in the cost of a college education, but the program is designed to help families begin to save. According to the College Board, the average cost of tuition and fees for four years at a private college is $129,640 and $95,560 for a public college.
A Goldberg aide said that Robert Hildreth’s $300,000 donation from the Hildreth Stewart Charitable Foundation would be sufficient to fund the first year of the program. Afterward, the state plans on using donations and numerous public-private partnerships to fund the program.