SeedMA is a pilot program designed by the Office of the Treasurer and Receiver General of Massachusetts and MEFA to help families in eligible communities invest in their child’s post-high school education and training. The pilot program commenced in the Fall of 2016 and currently provides kindergarten students in the Worcester and Monson Public School Systems with an initial $50 deposit to establish a Massachusetts 529 college savings account (also known as the U.Fund College Investing Plan).
There are many ways to save money for college. Regardless of how you do so, putting aside money early and often is a great way to help your child pay for college costs. If you start setting aside $50 a month while your child is in kindergarten, your money may grow because of the interest you earn on your savings.
If your U.Fund account earns a 7% average annual return, and you save $50 per month, you may have over $12,000 in the account when your child goes to college. Even if you can only save $15 or $25 per month, the money in the account will grow because of the interest you earn.1
Additionally, research shows that establishing a college savings account may make a child up to 7 times more likely to attend college.2
In 2018, children attending kindergarten in the Worcester or Monson Public School System for the 2017-2018 school year may be eligible to open a 529 account through the SeedMA program. To be eligible to open a 529 account, both the adult account owner and the child beneficiary must have a Social Security Number or Tax Identification Number.
Beginning in January of 2020, BabySteps will be available to every child born or adopted in Massachusetts.
Frequently Asked Questions
The gateway city of Worcester was selected for the SeedMA pilot program because of its strong community networks and its unique ability to take advantage of opportunities and solve problems.
As the second largest city in New England, Worcester represents a diverse population in terms of educational attainment, income levels, and ethnicity. Combined with the many public and private colleges and universities in Greater Worcester, the city serves as an exemplary model for the three-year pilot program.
After the SeedMA program was launched in Worcester, Monson Savings Bank contacted the Office of the Treasurer and Receiver General of Massachusetts to propose expanding the SeedMA program to the Town of Monson. Through donations to the Economic Empowerment Trust Fund, Monson Savings Bank funds the SeedMA Monson program. Like the SeedMA Worcester program, the SeedMA Monson program will provide $50 for every kindergartener attending the Monson Public School System for the 2018-2019 school year.
A 529 college savings account is a tax-advantaged account specifically designed to help families save for college through professionally managed portfolios of mutual funds.
- Funds in the account can be used to pay for a variety of higher education and accredited vocational and technical training expenses, including tuition, fees, room and board (subject to certain restrictions), books, supplies, and computer equipment.
- Earnings in an account grow tax deferred.
- Qualified withdrawals are not subject to federal or state income taxes.
- Additional contributions can be made until the account and any other U.Fund account established for the same beneficiary has a balance of $400,000.
- There are no annual account maintenance fees. Refer to the U.Fund Fact Kit for investment fee information
The initial $50 deposits are provided through the Office of the Treasurer and Receiver General of Massachusetts and are funded by the Economic Empowerment Trust Fund, which received its funding for the SeedMA program through public-private partnerships.
Research shows that putting aside money early and often is a great way to build your savings and help your child pay for college. Every dollar saved today will help strengthen your child’s aspirations for higher education, and even small dollar contributions make a difference. Studies show that children with $500 or less saved for college are 3 times more likely to attend college, and 4 times more likely to graduate.*
*Assets and Education Initiative. (2013). Building Expectations, Delivering Results: Asset-Based Financial Aid and the Future of Higher Education. In W. Elliott (Ed.), Biannual report on the assets and education field. Lawrence, KS: Assets and Education Initiative (AEDI).
Beginning in 2020, the program will be inclusive of all children born or adopted in Massachusetts. This will allow families even more time to begin saving for their child’s future.
Families should aim to contribute to their 529 college savings account on a monthly basis.
Here are some ideas to help your savings grow:
- Set up a monthly direct deposit into your 529 account, either through your employer’s payroll or your bank account.
- Save a percentage of your tax refund each year for your 529 account.
- Encourage your children to actively participate in saving.
- Ask family and friends to contribute to your 529 college savings account on holidays and birthdays.
Please note that while the $50 deposit is funded by the Economic Empowerment Trust Fund and through the Office of the Treasurer and Receiver General of Massachusetts, any additional funds deposited into the account are investments of the account owner and are subject to various risks. Before making any such investments, you should carefully review the U.Fund College Investing Plan Fact Kit, which contains important information that should be considered in connection with any investment in the U.Fund College Investing Plan.
Every account established through the SeedMA program comes with the following benefits:
- Free access to college saving and planning strategies.
- Direct access to additional tools and information through MEFA.
More About the Program Partners
The SeedMA program is implemented by the Office of Economic Empowerment of the Office of the State Treasurer and Receiver General of Massachusetts ("Office of the State Treasurer").
Through funding provided by the Economic Empowerment Trust Fund (“EETF”), the Office of the State Treasurer facilitates a $50 deposit to eligible kindergarten students to establish a U.Fund 529 College Investing Plan account. The EETF is administered by the State Treasurer and is a recognized 501(c)(3) non-profit organization that is statutorily authorized to support and facilitate the establishment of college savings accounts in cooperation with the Massachusetts Educational Financing Authority “MEFA”.
Funding for eligible accounts opened through the SeedMA program is provided by EETF, and the Office of the State Treasurer implements the programmatic goals of the EETF. The EETF is able to provide funding for the SeedMA program because of the generous donations provided by supporters of the SeedMA program.