A new Illinois law gives every child born or adopted after 2021, $50 to start a college savings account.
It’s part of a new law, which introduces the Illinois Higher Education Program.
State legislators passed this law to combat rising college tuition costs.
Lawmakers hope it will encourage parents to contribute to their child’s college fund at an early age and local investment bankers said that's key to saving success.
"The sooner, the better," Elise Tyrpin, Raymond James Investment Executive at Mercantile Bank." A lot of the times, once couples start a family, they think they don't have to start saving for college, that is 18 years down the line. But 18 years, $50 a month, adds up. Plus, on top of that, you're investing it."
Investment experts add that the money will grow to a few hundred dollars over time due to interest, but you can set up a plan to add even small amounts at a time it adds up over time.
It can also be used in a variety of ways.
"The price of college is going up," Tyrpin said. "But the nice thing about this is, it doesn't have to be used for a traditional four year school. You can use it for vocational schools, two year colleges, and even private schools. In Quincy, you can use it for Quincy Notre Dame. That's the nice thing about this is that with everything going up, it does help you plan that budget."
The state treasurers office estimates it will cost the state $8 million to start the program and another $1.5 million each year after.
High school graduates who don’t use the $50 plus any money saved by the time they’re 26 will be forfeited back to the state for other students in the future.
Connecticut, Maine, Rhode Island, Nevada, Vermont and Pennsylvania have similar programs.
To read more about the plans, click here.
According to the Center for Social Development, children who have a college savings account are approximately three times more likely to attend college.
Research done by The College Board organization showed that in 18 years, tuition for a four year college could add up to as much as $420,000.