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  • What to know about free money waiting in state-funded savings accounts | Quick Guide

    What to know about free money waiting in state-funded savings accounts | Quick Guide


    hept27 / iStock

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    Over 3.6 million school-aged children across the state qualify for at least $500 in savings with the California Kids Investment and Development Savings program (CalKIDS), a state initiative to help children from low income families save money for college or career. 

    However, many families are unaware of CalKIDS or face challenges accessing the accounts once they learn of them. The money is automatically deposited into the savings account under a student’s name, but families must claim the accounts by registering online. 

    Here is information you should know about the state-funded accounts: 

    What is CalKIDS? 

    The CalKIDS program was created to help students, especially those from underserved communities, gain access to higher education. It helps families save for post high school training by opening a savings account and depositing between $500 and $1,500 for eligible low-income students in the public school system. Gov. Gavin Newsom, who launched the program in August 2022, invested about $1.9 billion in the accounts.

    Who qualifies? 

    Low-income students and all newborns qualify. 

    According to program details, low-income public school students are awarded $500 if they:

    • Were in grades 1-12 during the 2021-22 school year 
    • Were enrolled in first grade during the 2022-23 school year, or 
    • Will be in first grade in subsequent school years. 

    An additional $500 is deposited for students identified as foster youth and another $500 for students classified as homeless. 

    For newborns, 

    • Children born in California after June 2023, regardless of their parents’ income, are granted $100. 
    • Those born in the state between July 1, 2022, and June 30, 2023, were awarded $25 before the seed deposit increased to $100. 
    • Newborns get an additional $25 when they claim the account and an additional $50 if parents link the CalKIDS account to a new or existing ScholarShare 529 college savings account. 

    The California Department of Education determines eligibility based on students identified as low income under the state’s Local Control Funding Formula or English language learners. The California Department of Public Health provides information on newborns.

    How can students use the money? 

    The money can be used at eligible higher education institutions across the country, including community colleges, universities, vocational or technical schools and professional schools, according to CalKIDS. 

    The funds can be used for: tuition and fees, books and supplies, on or off-campus room and board as well as computer or other required equipment, according to the CalKIDS program guide. 

    Click here to search for schools that qualify as an eligible higher ed institution. 

    Does the CalKIDS account have restrictions similar to those for a 529 savings account? 

    CalKIDS accounts are a part of the ScholarShare 529 program — California’s official tax-advantaged college savings plan — and administered by the state’s ScholarShare Investment Board. 

    Transportation and travel costs are usually not considered qualified expenses for 529 savings accounts. 

    According to the guide for CalKIDS, if a student has no account balance with their higher education institution — which receives the CalKIDS distribution check —  the institution can pay the funds directly to the student. 

    Does the money in the CalKIDS accounts earn interest? 

    The deposits grow over time because CalKIDS accounts are interest-bearing.

    How aggressive that growth is depends on the age of the student, said Joe DeAnda, communications director with the California State Treasurer’s Office, which oversees the CalKIDS program. 

    “If it’s a newborn, (the seed deposits are) invested in a fairly aggressive portfolio that assumes 18 years of investing time,” DeAnda said. “If they are school-aged, they’re invested in a more conservative portfolio that assumes a shorter investing timeline and is a more secure portfolio.”  

    Even among students, the younger a child is, the more aggressive the savings portfolio will be. The investment provides “opportunity to grow savings while the child is younger and better safeguard savings against market fluctuations when the child nears college age,” according to the CalKIDS program guide.

    Specifically, accounts for newborns, each new class of first graders and students in grades 1-5 during the 2021-22 school year are invested in a portfolio that corresponds to the year that they’re expected to enter a program after high school, or at age 18. The portfolio will become more conservative as the child gets older. 

    For students in grades 6-12 during the 2021-22 school year, the accounts are invested with a guaranteed, or fixed, rate of return on the investment. 

    Can I add to the account? 

    No, you cannot add money to the CalKIDS account. Parents or guardians can open a ScholarShare 529 account, which can be linked to the CalKIDS account so they can view the accounts in one place. 

    In fact, CalKIDS encourages families to open a ScholarShare 529 college savings account, which is a way for families to save even more money for their children, DeAnda said. 

    What if my student already graduated? What happens to unclaimed money? 

    The accounts remain active under a student’s name until the student turns 26 years old. Up until that age, students can claim the money. 

    If the account is not claimed by age 26, the account closes, and the money is reallocated to others in the CalKIDS program, DeAnda said. 

    What if I’m not sure if my child is considered low income? 

    CalKIDS has sent notification letters of program enrollment to over 3.3 million eligible students and nearly 270,000 students in last school year’s class of first graders. 

    Without the letters, to check student eligibility, families must enter students’ Statewide Student Identifier (SSID), a 10-digit number that appears on student transcripts or report cards, according to the CalKIDS website. 

    The California Department of Education provides CalKIDS with data on first graders in the late spring or early summer and asks parents to wait until then before checking for their child’s eligibility. 

    How do I access that SSID number to check eligibility or to register the account? 

    The SSID may be found on the parent’s or student’s school portal, transcript or report card. 

    The CalKIDS website instructs families to contact their child’s school or school district if they’re unsure of how or unable to locate the number.

    How do I access or ‘claim’ the account? 

    The notification letter that CalKIDS sends families contains a unique CalKIDS Code that can be used to register the accounts. Even without the code, families can register the accounts. 

    https://www.youtube.com/watch?v=bpyvh5aBgRE

    To claim the student account: 

    1. Visit the CalKIDS registration page to claim the account. Click here to register. 
    2. Enter the county where the student was enrolled (for a student in grades 1-12 in the 2021-22 school year; for a first grader, where the student was enrolled in 2022-23 or subsequent years)
    3. Enter student’s date of birth
    4. Enter the SSID or CalKIDS Code from the notification letter
    5. Click Register
    6. Set up the account, either as the child or as the parent/guardian, with a username and password

    To claim the newborn account, which should be available about 90 days after birth: 

    1. Visit the CalKIDS registration page to claim the account.
    2. Enter the county where the child was born
    3. Enter child’s date of birth 
    4. Enter the Local Registration Number on the child’s birth certificate or CalKIDS Code from the notification letter 
    5. Click Register
    6. Set up the account, either as the child or as the parent/guardian, with a username and password
    I still need help. How do I get additional support? 

    Contact CalKIDS at (888) 445-2377 or https://calkids.org/contact-us/ 

    How does my high school graduate make a withdrawal to use the money?

    According to the CalKIDS program guide, to request a distribution, log into the claimed CalKIDS account and request a distribution, which doesn’t have to be for the entire amount. The funds are tax-free for the qualified expenses of tuition, books, fees, computers and equipment. 

    The student must be at least 17 years old and enrolled at an eligible institution. 

    The CalKIDS money, which will be sent to the institution, is considered a scholarship from the state of California.





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  • Waiting for financial aid offers creates problems for California students

    Waiting for financial aid offers creates problems for California students


    Sierra Community College in Rocklin.

    Credit: Sierra College / Flickr

    This summer was filled with stress for Leslie Valdovinos as she awaited her financial aid offer letter for her fourth year at California State University, Dominguez Hills.

    “I don’t have a backup plan in case I can’t rely on financial aid,” Valdovinos said. “Financial aid is the only plan that I have.”

    Leslie Valdovinos

    Widespread problems with the revamped Free Application for Federal Student Aid (FAFSA) caused unprecedented difficulties with the application resulting in delays in college decisions and making it particularly hard for the many “mixed-status” students in California — students who have at least one parent without a Social Security number — to complete the form. Students are still experiencing delays in getting their financial aid information.

    “It’s very stressful because tuition is going up, and I’m not sure how my financial situation is going to look like for this school year,” Valdovinos said.

    Valdovinos finally received her financial aid offer letter on Aug. 8, but many are still waiting. As of May, 28% of students nationwide had not received their financial aid offer, according to a survey done by the National Association of Student Financial Aid Administrators.

    Some students have been able to get scholarships to help cover the costs of school. Azul Hernandez, an incoming freshman at California State University, San Bernardino has gotten help from local scholarships. 

    “Right now, I am able to cover my tuition for this year through local scholarships that I was awarded but am still fighting to get aid to help cover the years to come and other fees like books,” Hernandez said. 

    California State University, Monterey Bay (CSUMB) has started offering a $4,000 “backup” scholarship to support low-income students whose financial aid is delayed. The money is aimed at low-income California residents.

    “This initiative comes as a response to the challenges posed by FAFSA delays, with CSUMB committing to support its community by ensuring no student is left behind due to procedural setbacks. The scholarship is designed to provide immediate relief to students who are still awaiting federal and state aid decisions,” said a notice announcing the program.

    While some students might be able to make it through the school year without financial aid, many will not be able to continue with school if they do not get their financial aid offer in time.

    Jonathan Ramirez is supposed to start his first year at Victor Valley College in a few weeks but has not yet received his financial aid letter. 

    “I’m kind of worried because, you know, I don’t really have that much money, and I kind of want that money because I want to keep going to college and get a career and stuff. Without (financial aid) I don’t think I’ll be able to,” Ramirez said.

    If he doesn’t receive his financial aid and has to drop out of school, Ramirez said he plans on going to a trade school or start working to save up money.

    With the decline of completed FAFSA forms across the state, Ashish Vaidya, president and CEO of Growing Inland Achievement, is concerned that fewer students will be able to attend college. Through Aug. 2, 49% or 298,026 members of the Class of 2024 completed an application. That’s 30, 550 fewer than 2023.

    Vaidya described this year’s rollout of the FAFSA as having “a catastrophic impact on the students, especially in the Inland Empire,” referring to a feared drop in the number of students who would attend college.

    Growing Inland Achievement (GIA) is a nonprofit organization working toward education and economic equity in the Inland Empire, which is made up of Riverside and San Bernardino counties. GIA supports students through the financial aid process with workshops, step-by-step guides and digital resources to help students be successful.

    “This is an all-hands-on-deck sort of approach,” Vaidya said. 

    Other organizations, such as uAspire, a nonprofit that focuses on supporting students with the financial aid process, work with students directly with free one-on-one advice and financial aid workshops. 

    Valdovinos took advantage of the workshops and tutorials provided by her school, though she found the one-on-one attention the most helpful because it was so personalized.

    “(The tutorials) gave a nice guideline of what was going on, but I think because me and my brother’s and my sister’s applications were different, it was very frustrating because it didn’t really have all of our personal situations accounted for,” she said.

    Valdovinos said she hopes next year’s application will include “more detailed and accessible explanations for each section of the FAFSA, including examples and FAQs of all the possible scenarios that may come up,” which she said would help reduce confusion. 

    Typically, as has been the process for decades, high school seniors and community college transfer students would begin completing the FAFSA in October to meet California’s March priority deadline for access to state aid like the Cal Grant. During that period, those students would submit applications to the colleges and universities that they’re seeking admission to, so they would have their offer letters by early spring. The traditional timing allowed financial aid offices to send details about grants, loans and scholarships to students around March and April, in time for them to make a decision on the college they plan to attend in the fall. 

    But this year’s repeated FAFSA disruptions means colleges haven’t been able to send out aid awards, either because students have had trouble applying, the department has miscalculated some students’ aid, or colleges haven’t received any aid information from the department. Each award letter sent by colleges to their admitted students that complete a financial aid application is customized with a combination of federal, state and institutional grants, loans and scholarships.

    On Aug. 7, the Department of Education announced that the 2024-25 FAFSA will once again be delayed as the Federal Student Aid office works to identify and correct problems in the form. The new form will have a phased rollout, opening on Oct. 1 for testing, then launching on Dec. 1 with full functionality, “including submission and back-end processing at the same time.”

    “When they roll out the new FAFSA for the following year, you know, it will be a much improved process if you don’t have the glitches and the hiccups that we faced this past year,” Vaidya said. “So we’re hopeful about that; however, we’re not going to rest on our laurels.”

    GIA plans to amp up efforts this coming year to reach more students and get out the message that “college is for everyone.”

    U.S. Secretary of Education Miguel Cardona promised changes for next year’s FAFSA.

    “Following a challenging 2024-25 FAFSA cycle, the Department listened carefully to the input of students, families, and higher education institutions, made substantial changes to leadership and operations at Federal Student Aid, and is taking a new approach this year that will significantly improve the FAFSA experience,” he said.

    Ashley Bolter, a recent graduate of Cal Poly San Luis Obispo, is a member of EdSource’s California Student Journalism Corps.





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