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CA’s College Savings Plan Could Cost Almost $2B in First Year

August 30, 2022

The State of California’s new taxpayer-funded scholarship program to help pay for kids’ college tuition, CalKIDS, could cost taxpayers as much as $1.9 billion the first year.

The program is being rolled out to help children start saving for college from the day they’re born, the Los Angeles Times reported.


With tuition in the University of California system upwards of $13,000 a year, and fees, housing for on-campus students, meals and other costs adding another $25,000, students can pay almost $40,000 for a state school.

The state has decided not to lower tuition costs but to subsidize them by giving newborns up to $100 each for college savings accounts, and up to $1,500 each for older, low-income kids

In 2020, 420,259 babies were born in California, according to March of Dimes. At $100 each, that’s $42 million each year to California’s babies, if all parents opt in to the program. There is no citizenship requirement, the LA Times reported.

In the 2020-21 school year, the state had more than 6 million K-12 students, according to the California Department of Education. Six out of ten students are low-income. That’s 3.6 million students who are eligible for tuition scholarships from this taxpayer funded system

Not many will get the entire $1,500 — low-income children entering first grade in public schools will automatically receive $500. Kids living with foster parents will receive another $500; homeless kids will get an additional $500.

Public-school students who were in grades 1 through 12 last year will be automatically enrolled, with the same grants available, the LA Times reported.

The Sacramento Bee reported that the program dedicates $1.9 billion to low-income students in grades 1-12 and newborns who were born on or after July 1.

State officials say the “free” money is meant to encourage more kids to continue their studies after high school. That’s a noble goal but spending taxpayer money to do so, all while keeping tuition rates high, isn’t the way to do it.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com

This article was originally published by RealClearPolicy and made available via RealClearWire.
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