Senate Bill 1760: Children’s Savings Accounts

March 15, 2009

This legislation would expand the existing Texas Save & Match Program for eligible beneficiaries who open a higher education savings plan (529 Plan) or purchase a prepaid tuition contract (Texas Tomorrow Fund II), thus providing an opportunity and incentive for lower and middle class families to start saving for their children’s post-secondary education. 

To be eligible for the match, the beneficiary must be resident or dependent of a resident; be younger than 7 years of age; and have a household adjusted gross income that is not more than 400% of the federal poverty level (for family of 4, 400 percent of federal poverty level (FPL) is $88,200).  Guidelines provided to Prepaid Higher Education Tuition Board for match contributions for each eligible dollar are:

• $2 if household income is less than or equal to 200 percent of FPL (for family of four, 200 percent = $44,100; Max contribution would be $5000)
• $1 if household income is more than 200 percent but less than 300 percent of FPL (for family of four, 300 percent = $66,150; Max contribution would be $2500)
• 50 cents if household income is more than 300 percent but less than 400 percent of FPL (for family of four, 400 percent = $88,200; Max contribution would be $1250)

Not more than $500 per year will be matched, for a maximum of 5 years (consecutive or non-consecutive years).