Bill proposes state higher education savings plan for newborns

Higher education can be expensive and new parents may wonder how they will be able to pay for it.

To help parents begin saving for a post-secondary education, HF2908 would automatically create a 529 college savings account for every child born after June 2026 in Minnesota. The bill was laid over by the House Higher Education Finance and Policy Committee Thursday.

“I think that we need to continue looking forward to the future and how we can make a better educational path for all of our kids and the people of Minnesota,” said Rep. Carlie Kotyza-Witthuhn (DFL-Eden Prairie), the bill sponsor.

MinneKIDS accounts would automatically be created, administered and invested in accordance with the laws on the state’s 529 plan by the Office of Higher Education.

The office would make an initial deposit of $50 into each new account, and an additional $50 for children from low-income households.

A special revenue fund account would be created to operate the program with a yet-to-be-determined appropriation for fiscal years 2026 and 2027.

“While a $50 or $100 investment may seem modest, research shows that even small amounts can dramatically impact a child’s educational future,” Ivette Izea-Martinez, senior program officer of advocacy at Greater Twin Cities United Way, wrote to the committee. “Studies reveal that children from low-income households with savings of just $1-$499 are three times more likely to attend college and four times more likely to graduate than their peers without savings accounts.”

[MORE: Written support of bill]

In addition, a local partner grant program would be created to provide grants to entities to encourage college readiness, saving for college and participation in the MinneKIDS account program.

Rep. Kristin Robbins (R-Maple Grove) questioned if adding another grant program is a good idea.

“It just feels like we have so many groups that already do this kind of outreach work about college and we've been trying to streamline some of that as a committee,” she said. “I'm just concerned about creating a whole new layer of grant programs. Maybe you work with OHE and think about who already is doing this work, we don't need a whole new round of grant programs.”