Kids born or adopted in Colorado starting this New Year's Day will be eligible for $100 in free college savings.
To get the money, parents will have to open a 529 college savings account with CollegeInvest, a nonprofit arm of state government.
Now, a hundred bucks won't pay for many credits, even with 18 years of interest. But it could start families saving, said Angela Baier, CEO of CollegeInvest.
"We wanted it to be a significant enough amount that it would cause behavior change — that people would be incentivized to open that account," Baier said. "It changes their perspective of going to college ... if they just know they have an account in their name.”
Known as First Steps, the $100 contribution is available to U.S. citizens and others with social security or federal tax numbers. The program will allow people to open accounts with no money down.
CollegeInvest has set aside $12 million to pay for First Steps. The money comes from the organization's investment operations, not from tax dollars, Baier said.
About 2-6 percent of families have participated in similar programs in other states. The Colorado version is the result of new legislation sponsored by state Reps. K.C. Becker and Leslie Herod and state Sen. Steve Fenberg.
CollegeInvest launched 20 years ago. Its 529 savings accounts allow tax-deductible contributions and tax-free earnings for education costs. The organization also pays matching grants and scholarships.
More information is available at collegeinvest.org. Applications for the $100 payment will be accepted beginning Feb. 18.