CONWAY, Ark. (February 8, 2008) Education officials, along with Sen. Gilbert Baker of Conway, held a press conference Friday, Feb.8, at Sallie Cone Elementary School in Conway to continue publicizing the Aspiring Scholars Matching Grant, a pilot program intended to provide incentive to lower and middle income families to save for their children’s education. This program makes funds available for working families who wish to invest in the Arkansas 529 GIFT Plan, the state’s federally authorized, tax-deferred savings plan for higher education.

“The education of our children is the hinge on which our future swings,” said Gov. Mike Beebe last month when the plan was rolled out. “Every family in Arkansas needs to make saving money for college one of its highest priorities. Research has shown that, given the right incentives and the right vehicle, working families can and will save for their future.”

At the event held at Sallie Cone Elementary, Baker, UCA President Lu Hardin, Arkansas Department of Higher Education Deputy Director Steve Floyd, and Southern Good Faith Fund Policy Director Mike Leach outlined some of the specifics of the program.

The Aspiring Scholars Matching Grant, a pilot program created by ACT 597 of 2007, sets aside $250,000 over two years to match funds deposited into the Arkansas GIFT Plan, an investment plan managed by UPromise Investments Inc. The GIFT plan is a unique college savings vehicle offering tax-deferred earnings and tax-free withdrawals for higher education expenses.

To qualify for matching funds, Arkansans enrolled in the GIFT Plan must earn an adjusted gross income (AGI) of $60,000 or less to qualify for a one-to-one match of up to $500 annually. Arkansans who earn $30,000 or less AGI can qualify for a two-to-one match of up to $500 annually. Also, GIFT Plan account holders must be Arkansas residents whose account beneficiaries are also residents.

“This program provides incentive for families to focus on higher education early in a child’s life,” Baker said. “Preparing early for a college education will provide motivation to children through the knowledge that they can afford a post-secondary education.”

Turning his attention to a group of fourth graders that attended the conference, Baker urged them to tell their parents about the program.

“I want all of you to go home and tell your parents, look here, there’s money for me to go to college,” he said. “There’s money out there for me to go to college.”

The Aspiring Scholars program was modeled after successes in the state’s Individual Development Account program and a demonstration project in Helena-West Helena called SEED.

“Seventy-five elementary-school children have been participating in the SEED children’s saving-account demonstration project under Southern Good Faith Fund,” said Mike Leach, policy director of Southern Good Faith Fund. “These kids have already saved an average of $1,777 toward college, and more importantly are already talking about where they want to go to college and what kind of careers they want.”

“One of the things we’ve seen over time concerning investments is that people in these income brackets typically don’t invest at rates as high as people in higher-income brackets,” said Dr. Steve Floyd. “As higher education becomes more and more of a priority in economic development, this legislation is intended to provide an incentive for Arkansas residents in these income brackets to save for their children’s education and help relieve some of the financial burden in later years. What we know is that every dollar saved now toward education is a dollar that doesn’t have to be borrowed later, or a dollar that a student won’t have to work for at the expense of his or her studies.”

As the Aspiring Scholars Matching Grant is a pilot program authorized by the state legislature, funds are limited, and will be granted based on need following closure of the application period April 30.

Applications for the Aspiring Scholars Matching Grant will be handled through the office of Arkansas State Treasurer Martha Shoffner. Interested persons who would like more information on the Arkansas GIFT Plan or Aspiring Scholars Matching Grant may go online to www.thegiftplan.com for information and forms. Persons without Internet access may contact the treasurer’s office at 501-682-1422 for an enrollment kit.

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