When it comes to holiday gifts, kids (and even us adults) often gravitate toward shiny new toys, the latest gadgets and stylish clothes. But usually these wear out, quickly become uninteresting or are just forgotten. One gift that will never be forgotten: college savings. A gift to a child’s college savings fund can last a lifetime, helping to create a bright future for that child.
In California, the state’s official college savings plan – ScholarShare 529 – provides two great options for saving. First, the plan offers a free, easy and secure way for friends and family to make gift contributions to a ScholarShare 529 college savings account. Anyone can contribute electronically or by mail and give a gift that grows with kids and lasts a lifetime. In addition, families who haven’t started saving for college can open a new ScholarShare 529 account between December 9-13 and take advantage of a holiday offer to earn a $50 Target gift card.
Even small savings can make a big difference. For example, an initial $50 contribution and subsequent $25 monthly contributions can add up to a significant college savings over an 18-year time horizon. Savings can be completed through a simple and easy process.
Prioritizing college savings in a challenging year
Giving the gift of college savings means you will be joining the many California families still working to create brighter futures for their children by prioritizing college savings. They are doing this with the resilience and hope that has always characterized the Golden State. More than three-quarters (79%) of California families surveyed in a 2020 Market Study said that helping their children afford college is one of the most important things they can do as a parent. This may be why, even in the midst of the COVID-19 pandemic, many families actually saved more for college this year. Contributions in 2020 to ScholarShare 529 set new records, and we’re having one of our best years ever when it comes to opening new accounts.
Why are Californians continuing to prioritize college savings despite today’s challenges? We suspect there are several factors.
First, California families understand that a college degree remains one of the best investments they can make for their children. As an example, college graduates in 2018 earned weekly wages that were 80% higher than those of high school graduates. The importance of higher education continues to be underscored as COVID-19 reshapes the economy and workforce needs, and saving early (and as much as possible) is the pathway to making higher education a financial reality.
In addition, even small amounts of college savings make a big difference: Studies show that children with college savings of only $500 are three times more likely to enroll in higher education and four times more likely to graduate than those without a college savings account. And finally, even as COVID-19 continues to transform the college experience, the cost of college isn’t going away. In fact, college costs will likely continue to rise even as the student experience evolves.
Clearly, 2020 has been a challenging year on many fronts. Despite the obstacles created by the pandemic and the wildfires, saving for college should remain a priority for families. ScholarShare 529 is here to help families realize their higher education goals and help build hope for the future.
As you plan for the holiday season, consider putting college savings contributions on your present list. It’s a gift that lasts.
To learn more about ScholarShare 529, and how you can start saving for college this holiday season and beyond, visit ScholarShare 529.
Fiona Ma is California State Treasurer and a former San Francisco Supervisor.