Thousands of Maine kids will get a start on college savings next year — just by being born. The Harold Alfond College Challenge goes statewide on Jan. 1 after a successful start this year at MaineGeneral Health facilities in Waterville and Augusta.
The challenge will provide a $500 scholarship, to be invested in a NextGen College Investing Plan account, for each newborn in Maine beginning on New Year’s Day. More than 14,000 babies are expected to be born in the state next year.
The challenge began last January with funds from the late Harold Alfond, the founder of Dexter Shoe and the state’s first philanthropic foundation. This year, 320 babies have been given the scholarships.
According to the Finance Authority of Maine, it is estimated that in 18 years at 8 percent interest a $500 grant, without any additional contribution, would grow to $2,000. With a contribution of $50 per month, the account could grow to $25,000 in 18 years, a strong inducement for families and employers to seek ways to make such further contributions a reality.
The message behind the scholarship program is as important as the money itself. In a state where too few students go on to college, getting parents to think about — and better yet to plan and save for — their children’s higher education is a big boost.
A report by the Mitchell Institute released last summer found that plenty of Maine students and their families had college aspirations. The problem was they weren’t planning for it.
According to the report, 85 percent of high school juniors and seniors said they expected to go on to a four- or two-year college right after high school. In 2006, however, only 57 percent of that year’s high school graduates enrolled in college, the lowest in more than five years and below New England and national averages.
The report cited many reasons for the college gap, but finances remain a top concern. “Nothing will prevent me from going to college except money,” a high school student told the institute researchers. Parents, too, are concerned with paying for college with about a third saying finances will determine if their children attend college and two-thirds saying finances will determine which school their child attends.
This is a costly decision. Someone with a bachelor of arts degree earns on average 62 percent more than someone with a high school diploma, worth about $1 million more over a lifetime of work. Also consider, in 1950, 60 percent of jobs in Maine were blue collar; now only 25 percent are. Two-thirds of the state’s fastest growing economic sectors require education beyond high school.
Mr. Alfond’s legacy in money and in philosophy will help a new generation be better prepared for these and other challenges.