Bill encourages saving for college
Published March 2, 2007
JEFFERSON CITY — Families wondering how they can afford higher education might receive a helping hand if the Missouri General Assembly passes the Missouri Legacy Initiative.
The Senate Education Committee met Wednesday to discuss a bill sponsored by Sen. Gary Nodler, R-Joplin. The bill would create a fund paid for by the Missouri Unclaimed Property Fund.
"What this fund would do is it would create the investments from which the interest would be drawn to make these payments," Nodler said during the meeting. "So there would be no actual expenditure of any state revenues other than the interest on this newly created fund."
In the last two years, Missouri has seen a spike high above the average in the amount of revenue gathered from the unclaimed property fund.
Nodler's bill would take advantage of the increased revenue to create the new fund before unclaimed property revenue returns to its normal level.
In 2006, Missouri gathered about $46 million from the Unclaimed Property Fund, Assistant Deputy State Treasurer Doug Gaston said in testimony before the committee. Normally, this money is put directly into the general revenue fund, but the language of the Legacy bill proposes that each fiscal year, all money in excess of $22.5 million is transferred to the Legacy fund.
Accumulated interest on the fund would be used to provide college financial assistance to participants in Missouri's qualified state tuition program.
"With this fund, we could say that for low- and middle-income Missouri families, for maybe the first $100 that they put in every year into this college savings, the state would match that dollar for dollar," Gaston said.
Citing a Washington University study, Gaston said one of the best ways to encourage families to save for college is through matching grants.
He said nine other states have matching grant funds similar to the proposed legislation.
Nodler and Gaston said they hope to limit the fund's aid to low and middle-income families, but the language of the bill does not mention specific income levels.
Gaston said he hopes a substitute of the bill could include this provision and estimated that 150 percent of the median family income would be a sufficient cap to determine which families to aid.
There was no testimony in opposition to the bill.
"We're on a mission to give every child in this state an opportunity to go to college," Gaston said. "This is one big step in making that a reality."
