In Oklahoma and Maine, Babies Get Funds for College Savings Plans

Could giving babies college funds encourage parents to take an early interest in their children's educations? To find out, researchers at Washington University in St. Louis's Center for Social Development have started college savings for more than 1,300 infants in Oklahoma. As part of a seven-year study called SEED OK, the families, randomly selected, received $1,000 in state-administered college savings plans, plus commitments, depending on income eligibility, to match additional family deposits up to $250 per year for up to four years.

Michael Sherraden, founder and director of the CSD, says the study will monitor how the funds influence the way parents view college opportunities for their children. The theory goes that parents might be more inclined to add to college funds that already exist and pay more attention to their children's educational development, he says.

In Maine, the Harold Alfond Foundation has offered similar $500 grants for any child born at MaineGeneral Medical Center since the beginning of 2008. The program could cost more than $7 million a year when it launches statewide next January. The foundation hopes families will make additional contributions to the savings; the Financial Authority of Maine estimates that with an added $50 per month, the fund would grow to more than $25,000 by the child's 18th birthday.