Albert Einstein said, “The most powerful force in the universe is compound interest.”
A bill by Rep. Christine Kilduff (D-University Place) would unleash that power for every child in Washington state.
“Every child deserves a chance to earn a college degree,” Kilduff said. “This legislation is about hope, about giving kids a chance. Because too many smart students today see the sky-high price of tuition and think there’s no way their family can afford it. We can do better.”
The bill establishes the Washington Next Generation Educational Savings Account, similar to what’s working in Maine, Vermont and other states.
Here’s how it works: when a baby is born, an educational savings account is created for that child. An initial deposit of $250 is put in the account. If a low-income family deposits $250, there’s a matching grant.
Just as in other states, this would be a public-private partnership, with funding for the accounts coming from private sources and investments, much like businesses and foundations contribute to our state’s existing Opportunity Scholarships.
“If you only put in $250 a year, that child will have almost $5,000 saved up for college by the time they’re 18 years old,” Kilduff said. “If you saved $50 a month, you’d have $11,400 when they graduated from high school.”
Those numbers assume a zero percent interest rate or return on investment. Most 529 plan actually earn interest or are invested.
Having a college savings fund for every child also has other benefits.
“Low and moderate-income students with access to these savings accounts are three times more likely to enroll in college,” Kilduff said. “And they’re four times more likely to graduate from college.”
Kilduff pointed to the success of the Tacoma Housing Authority and Tacoma School District partnership in establishing a college mindset with young students. The goal is better high school graduation rates and a higher percentage of students enrolling in college.
“By the time children born this year are 18,” Kilduff said, “college won’t be seen as optional. A high school degree will only be the starting point. This legislation is a smart, affordable way to give every family hope that their sons and daughters will get the higher education they need to succeed in life.”
House Bill 2662 passed the Higher Education Committee with a unanimous vote. It will now be considered by the full House of Representatives.