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College-matching fund seeking aid
The Southern Good Faith Fund issued a call Monday for the state to find more money to help match low-income Arkansans’ college savings.
Mike Leach, the fund’s public policy director, said the “Aspiring Scholars” program is growing and the current state funds aren’t enough to sustain the matches.
The program was created by Act 597 in 2007 by the Legislature at the urging of the fund, Leach said.
It calls for the state to provide matching dollars to low-income Arkansans with 529 college-savings accounts, which provide for tax-free withdrawals from the fund for education-related purposes.
The money probably will be sufficient to sustain the program for the next couple of years, he said. His group doesn’t plan to ask for additional state money and is looking for private sources, he said.
The 2009 match is anticipated to be $242,000, according to Dale Ellis, a spokesman for the Department of Higher Education.
That number is expected to grow to $350,000 by 2011, an amount that could be handled by the current state funding, depending on operating costs of the program, he said.
There were 469 participants in the matching program in 2008. That has increased to 576 in 2009, according to the fund.
The fund is a nonprofit affiliate of Southern Bancorp, a $1 billion rural development bank with banking operations in Arkansas and Mississippi.
The Arkansas 529 Committee, which oversees the Aspiring Scholars program, has asked for donations from a couple of Arkansas corporations but has received no commitments, Ellis said.
The program has shown that given the right incentives people “can and will save” for college, Leach said.
The additional money coming from the state lottery for scholarships doesn’t erase the need for the college savings matches, he said, and the match program helps teach the value of saving money.