College Board wants to revamp Pell Grants so that they are essentially savings accounts for prospective students. The idea is that starting at age 11 until age 24 the children of low income to moderate income families will have “bank accounts” set up by the government. Should the kid decide to go to college they’ll be able to use 1/4 the funds for their first year of college, 1/3 of the remaining funds for the second year and so on and so forth.
Parents won’t be able to add or withdraw from these accounts, they are merely set up and collect interest over time.
College Board asserts, “Providing education accounts for low-income students cannot substitute for the schools the more privileged attend, the paths they follow, and the advantageous experiences they enjoy. But these accounts do have the potential to give young people from low-income backgrounds and their parents the confidence that college is not out of reach.”
This is so true. Believing that college is even an option for yourself is the first step to getting there. I’ve seen so many people discouraged from pursuing their dreams of higher education because they didn’t feel they had the resources.
“In addition to providing an early promise of available funding, accounts that accumulate over time have the advantage of being based on long-term financial circumstances, rather than on one year of information or even, as in our proposal, three years of family income. Children who grow up in consistently poor families will have larger accounts than those whose families were poor for a limited time. These accounts should supplement the Pell Y Grants awarded at the time students enroll in college.”
The amount given to each prospective student is income-based. The less advantaged you are the more you’ll be given, which is pretty great. Each student would receive 5 to 10% of their estimated Pell Y grant endowment (The Pell Y grant is the one you might have actually received today and the maximum is around $5,500.) a year, over time it would accumulate to a nice supplemental fund for college. We think it’s an interesting idea but most of all we like that it encourages families to start thinking about college for their kids as early as 11 years old. My parents never planned for me to go to college and I was a little lost once it became a real prospect.