Purpose of the Bill

The bill aims to enhance access to higher education through the establishment of a statewide children's savings account program. It seeks to make higher education more attainable for Minnesota residents by creating new financial investment accounts for children, particularly focusing on supporting low-income households.

Main Provisions

• Creation of MinneKIDS Accounts: The bill establishes MinneKIDS accounts for Minnesota residents under 18, starting from those born on or after July 1, 2026. A seed deposit of $50, with an additional $50 for children from low-income households, will be made into these accounts from the children’s higher education investment account.

• Usage of Funds: Funds can only be used for qualified higher education expenses, such as tuition at eligible educational institutions, before the beneficiary turns 26. Unused funds will be returned to the investment account if not used by the age limit.

• Opt-Out Provision: Parents or guardians can opt-out their children from this program, and if done, any money in the account will be forfeited and returned.

• Local Partner Grants: This section creates a MinneKIDS local partner grant program to encourage local entities to promote college readiness and savings. Grants are available for designing and implementing local savings programs and to align them with the statewide initiative.

• Notification and Engagement: The bill mandates annual notification to parents about their child's account, how to access funds, contribute, and potentially earn additional deposits.

Significant Changes to Existing Law

• New Legal Framework: It introduces new sections in Minnesota Statutes, Chapter 136G, defining terms and conditions related to MinneKIDS accounts.

• State Ownership and Management: The state will own and manage the invested funds in these accounts until used for educational expenses.

• Account and Grant Management: It provides for the commissioner to manage disbursements and account closures, including reversion of unused funds.

Relevant Terms

MinneKIDS, higher education savings plan, children's investment accounts, low-income households, seed deposit, college savings programs, educational expenses, state treasury, local partner grant, higher education finance.