Article Summary –
A bipartisan bill introduced in the Wisconsin State Legislature proposes creating a savings program, WisKids, for every child born or adopted in the state. The program would set up a state-owned savings account for each child, seeded with $25, which could be put towards post-secondary education once the child turns 18, or rolled into a retirement account at 26. The bill’s proponents believe that not only will this plan incentivize more families to start saving, but it will also help more students seek post-secondary education, and ultimately, contribute to reducing wealth disparities in the state.
Universal Savings for Wisconsin Children
Imagine every Wisconsin child having a savings account for higher education or retirement. A bipartisan bill in the Wisconsin State Legislature aims for this, promoting financial success and higher education rates.
The bill proposes the creation of a WisKids program that sets up a state-owned savings account for every child born or adopted in Wisconsin, seeding each with $25. At 18, the funds can be used for post-secondary education or rolled into a retirement account at 26. Democratic State Rep. Evan Goyke, who introduced the bill with Republican Rep. John Macco, believes it will encourage more residents to save and increase college attendance rates.
Goyke emphasizes the transformative effect of the initiative, stating, “It’s the mindset that changes in a household”.
WisKids is partly inspired by Pennsylvania’s Keystone Scholars program and bears similarity to Wisconsin’s existing 529 college savings program, EdVest. A distinction is that only charitable organizations and groups can contribute to WisKids accounts, which Goyke hopes will encourage more parents to open college savings accounts.
The WisKids initiative requires no additional state budget allocation. Funding will come from $20 million in fees previously collected from EdVest accounts that ceased in 2005. This accumulated fund could support WisKids for approximately 6-7 years, with future funding hoped to come from philanthropic contributions.
The accounts will be managed by the Wisconsin Department of Financial Institutions and the College Savings Board. Parents will receive a notice about the program when their child is born or adopted, and have a 30-day window to opt out. If not, the account will be created and money deposited.
Goyke, who sees wealth disparities in his Milwaukee district, believes WisKids could help bridge the gaps by providing financial tools for success. He also views the program as a means to boost post-secondary education rates.
Research shows that having a college savings account increases the likelihood of children attending and graduating college. It helps to foster a college-bound identity, inspiring more proactive steps towards education. Goyke concludes, “More than the money, it’s the mindset… there are no barriers to higher education because we put this money aside”.
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