GOV. MALLOY AND TREASURER NAPPIER ANNOUNCE LAUNCH OF CHET BABY SCHOLARS
State Will Contribute to Savings Accounts for Newborns
Governor Dannel P. Malloy, together with State Treasurer Denise L. Nappier,
visited the Friends Center for Children last week to announce the launch
of the CHET Baby Scholars program, which will help Connecticut families
start saving for college as soon as their children are born.
Governor Malloy introduced legislation establishing the CHET Baby Scholars
Fund within the Office of the State Treasurer to encourage savings for
newly-born and adopted children.
“Studies have shown that children with a college savings account,
of any amount, are seven times more likely to attend and graduate from
college than those with no account,” said Governor Malloy. “By
encouraging hardworking families to save for college right from the start,
this program – in addition to investments in the Connecticut State
College and University System – will help us build a future where
all of our students have access to high-quality educational opportunities.”
“The birth or adoption of a child is a joyous time, filled with promise.
There’s nothing like new life to give us hope for the future. What
better way to start your child on the path to future success than to begin
saving for his or her college education at the very start of their life’s
journey,” said Treasurer Nappier. “The CHET Baby Scholars
program has the potential to influence lifelong savings behavior and help
families and children alike understand the importance of owning assets.”
CHET Baby Scholars will deposit $100 into a CHET account for children born
or adopted on or after January 1, 2014. A second deposit of $150 will
be made if family and friends add at least $150 to the child’s enrolled
CHET account within four years. The deadline to participate is 12 months
after the child’s birth or adoption.
The legislation establishing CHET Baby Scholars adds the option for Connecticut
taxpayers to direct a portion of their tax refund either to the CHET Baby
Scholars Fund or to individual CHET accounts set up for their children
or other beneficiaries.
The new initiative also excludes the value of a CHET account in determining
financial aid at state colleges and universities, and from consideration
of other state-funded, means-tested programs. These exclusions will ensure
that families struggling to make ends meet while saving for a child’s
educational future won’t be unfairly penalized.
Parents can apply to open a CHET account and complete an enrollment form at
www.aboutchet.com.
About CHET
The CHET 529 college savings plan, of which Treasurer Nappier is Trustee,
is managed by TIAA-CREF Tuition Financing, Inc. and The Hartford. It was
established in 1997, and has grown to more than $2.2 billion in assets
and more than 100,000 accounts. More than $815 million in qualified withdrawals
have been taken to cover college costs for approximately 25,700 students.
The State of Connecticut offers CHET to help families save for future college
costs. Funds deposited into a CHET account have tax advantages and can
be used at accredited colleges and universities across the country, including
vocational and technical schools, and some colleges abroad.
Connecticut residents are allowed to deduct 529 contributions from their
state income taxes -- up to $5,000 for an individual or up to $10,000
for a married couple filing jointly. As with all 529 plans, investment
earnings are exempt from state and federal taxes if used for qualified
educational expenses.
CHET is an investment vehicle, not merely a savings plan. It offers investment
options, allowing participants to select an option or combination of options
that best fit their higher education saving needs and investment philosophy.
Options vary depending on the age of the beneficiary and the participant’s
tolerance for risk.
For more information about CHET, visit
www.aboutchet.com
or call the customer service center at (866) 314-3939.