New Howard County Promise to give kindergartners money for college

The Howard County Promise gives kindergartners the chance to set aside $125 this school year in a CollegeChoice 529 Savings Plan, which is a special savings account designated for higher education expenses. The program is modeled after the Wabash County Promise and is being spearheaded by United Way of Howard County, the Community Foundation of Howard County and Duke Energy.

Research shows children who have a savings account in their name are seven times more likely to attend college, said Jim Leslie, director of community impact at United Way of Howard County. In 2011, according to the most recent census estimates, only about 50 percent of Howard County adults 25 and older had attained any education beyond high school. The Howard County Promise aims to increase the percentage of the population pursuing higher education.

 “It is absolutely a great idea,” said Chris Smith, superintendent of Taylor Community School Corp. “This is a great opportunity for any family to jump on board.”

Families of incoming kindergartners will go through a condensed process of setting up a 529 Savings Plan at kindergarten registration at their respective schools. Northwestern School Corp. already held online registration, so they will offer the 529 Savings Plan forms at parent night. Home school students or students at private schools that are not offering assistance with the form can still participate in the Howard County Promise directly through United Way.

Once parents set up the account, the Community Foundation will deposit $25 for each student.

“This financial support allows students to concentrate on their ambitions,” said Hilda Burns, president of the Community Foundation of Howard County, in a press release. “We want students to know that their community is supporting them. We hope this encouragement builds confidence as they pursue their goals.”

Kindergartners will begin learning about college and potential careers during “College Savings Month” in September. Then all 1,200 of them will attend a “walk into my future event” in October at Indiana University Kokomo, where they will tour the campus and talk about what they want to do when they grow up.

At that event, children will be encouraged to ask five “champions” to each donate at least $5.29 to their 529 savings accounts.  Champions can be relatives, friends or any adults in their lives. An internal tracking company will identify when five different people have contributed to a child’s account, and then a 3:1 community match will deposit another $75.

“This program lays the pavement for a pathway of success through education,” said Laura Sheets, district manager for Duke Energy, which is leading off the community match component of the Howard County Promise. “It is more than helping families save for college, it also creates a mindset in children that they can achieve, that they have a future to work toward and that there are people in their lives who believe in them.

“Through the promise, we have the capability to do more than raise educational attainment levels, it also raise the level of hope and that is a great start,” Sheets added.

Beth Rattray, communications director for United Way of Howard County, noted that other community partners are needed to sustain the Howard County Promise.

“We need other people to do that as well,” she said. “It’s a community initiative.”

Students who complete all steps of the Howard County Promise will have at least $125 in their savings account by the end of the school year.

In Wabash County, where the YMCA is leading the promise program, only 6 percent of students in kindergarten through third grade had college savings accounts when the program started there in July 2013. Now, more than 65 percent of Wabash County students are saving for college.

In Indiana, taxpayers are eligible for a state income tax credit of 20 percent of their contribution to a 529 account, up to a $1,000 credit each year. Also, the earnings generated from investments through a CollegeChoice 529 account are not taxed, and the money is free from the federal income tax when applied to higher education expenses.

The money saved in a 529 account does not impact the amount of state financial aid for which a student will be eligible, and the savings are counted at 3 to 6 percent of their actual value when factored into a family’s expected contribution for federal financial aid.