MonticelloLive

Governor Mike Beebe, along with members of the Arkansas 529 Committee and the Aspiring Scholars Advisory Committee, announced a new college savings’ program, the Aspiring Scholars Matching Grant. 

This new program makes matching funds available for working families who wish to invest in their children’s future by investing in Arkansas’s 529 plan.

“The education of our children is the hinge on which our future swings,” Governor Beebe said.  “Every family in Arkansas needs to make saving money for college one of its highest priorities. 

Research has shown that, given the right incentives and the right vehicle, working families can and will save for their future.”

The Aspiring Scholars Matching Grant, a pilot program created by ACT 597 of 2007, sets aside $250,000 over two years to match funds deposited into the Arkansas GIFT Plan, an investment plan managed by Upromise Investments Inc. The GIFT Plan is a unique college savings vehicle offering tax-deferred earnings and tax-free withdrawals for higher education expenses.

To qualify for matching funds, Arkansans enrolled in the GIFT Plan must earn an adjusted gross income (AGI) of $60,000 or less to qualify for a one-to-one match of up to $500 annually.  Arkansans who earn $30,000 or less AGI can qualify for a two-to-one match of up to $500 annually.  To qualify for the matching funds, GIFT Plan account holders must be Arkansas residents whose account beneficiaries are also residents.

The Aspiring Scholars program was modeled after successes in the state’s Individual Development Account program and a demonstration project in Helena-West Helena called SEED.

“Seventy-five elementary-school children have been participating in the SEED children’s saving-account demonstration project under Southern Good Faith Fund,” said Mike Leach, Policy Director of Southern Good Faith Fund.  “These kids have already saved an average of $1,777 toward college, and more importantly are already talking about where they want to go to college and what kind of careers they want.”

“One of the things we’ve seen over time concerning investments is that people in these income brackets typically don’t invest at rates as high as people in higher-income brackets,” said Dr. Steve Floyd, Deputy Director of the Arkansas Department of Higher Education.

As the Aspiring Scholars Matching Grant is a pilot program authorized by the state legislature, funds are limited, and will be granted based on need following closure of the application period April 30.