DENVER — A new program in Colorado gives every child born or adopted in the state a $100 contribution to their CollegeInvest 529 college savings account.
The program is funded and administered by CollegeInvest without the expense of any taxpayer dollars, according to an announcement from the organization.
The program, "First Step," was created to help Colorado families save for their children’s postsecondary education.
CollegeInvest is Colorado’s not-for-profit state agency charged with helping working families prepare for the cost of postsecondary education and reduce student loan debt, especially for lower- and middle-income families.
The 529 plans work by allowing people to deposit funds into an account without having to pay taxes on the earnings now, or potentially ever, as long as those funds are used for qualified post-secondary education expenses.
"Every dollar saved counts when it comes to paying for education, and First Step will help Colorado families get their college savings plans off to a strong start, right from the beginning," said CollegeInvest CEO Angela Baier. "Opening a CollegeInvest 529 college savings account for a child at birth allows more time for savings to accumulate and interest to accrue."
In Colorado, people interested in using a 529 Savings plan can set up an automatic debit out of their account for as little as $25 a month. Funds within the plan are also invested so plan participants can earn money on their savings.
The legislation for the First Step program passed with bipartisan support and signed into law by Gov. Jared Polis in May 2019.
The one-time First Step contribution is available for all children born or adopted in Colorado as of Jan. 1, 2020.
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