Quick Guide: Unclaimed funds in state-funded savings accounts – Here’s what you need to know

More than 3.6 million state school children are eligible for a minimum of $500 in savings through the California Kids Investment and Development Savings program, known as (CalKIDS), designed to assist children from low-income backgrounds in saving for college or career endeavors.

A mere 8.3% of qualifying students, numbering around 300,000, have accessed their accounts due to a lack of awareness about CalKIDS or difficulty in accessing the accounts even after being informed. The funds are automatically deposited into accounts under the student’s name, but families need to claim the accounts by registering online.

Below are details you should be aware of regarding the state-sponsored accounts:

Understanding CalKIDS

The CalKIDS initiative aims to assist students, particularly those from marginalized communities, in accessing higher education. It aids families in saving for post-secondary education by establishing a savings account and depositing between $500 and $1,500 for underprivileged students within the public school system. Governor Gavin Newsom kickstarted the program in August 2022, allocating approximately $1.9 billion to the accounts.

Who is Eligible?

Low-income students and newborns are eligible for the program.

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

• Attended grades 1-12 during the 2021-22 school year
• Enrolled in first grade in the 2022-23 school year, or
• Will enter first grade in future academic years.

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

For newborns,

• Children born in California after June 2023, regardless of their parents’ income, receive $100.
• Those born in the state between July 1, 2022, and June 30, 2023, initially received $25 which later increased to $100 for the seed deposit.
• Newborns receive an extra $25 upon claiming the account and an additional $50 if parents link the CalKIDS account to a new or existing ScholarShare 529 college savings account.

Eligibility for students is determined by the California Department of Education based on students identified as low income under the state’s Local Control Funding Formula or English language learners, while information on newborns is provided by the California Department of Public Health.