$500 Of Free Cash For College: Maine’s Harold Alfond Grant
Adam Aucoin, Tax Manager
Are you thinking about starting a NextGen College Investing Plan in Maine for a newborn child? Do you instead have a recently-formed NextGen plan in place? What you might not know is that as part of the Harold Alfond College Challenge, your plan may qualify for a grant of as much as $500!
As you may know, NextGen is Maine’s (Internal Revenue Code) Section 529 college savings plan, and its purpose is to provide a tax advantageous way to invest for college. Among other benefits, earnings in Section 529 plans grow tax-free for use paying for beneficiaries’ qualifying costs of college education.
Harold Alfond was a well-known, successful Maine businessman, and he established a program that works in connection with the NextGen program. It will pay a $500 grant to the Section 529 plan formed for the benefit of any Maine resident baby (including a baby adopted by Maine parents or whose parents move to Maine before the baby’s first birthday), as long as the baby is enrolled in a NextGen account before his or her first birthday. No initial contribution needs to be made to qualify for the grant, although it was the hope of Mr. Alfond that families would invest their own money, in addition to his grant, in the child’s educational future.
Note that it does not have to be a parent who opens a qualifying NextGen account. Anyone who is at least 18 years old and has a valid Social Security Number or Federal Tax Identification Number can open an account, even if that person lives in another state, as long as the child listed as the beneficiary meets the qualifications previously mentioned. Often, it is an aunt, uncle or grandparent who opens the account.
What if you would like to start a NextGen account for the baby’s older siblings or other children who do not meet the criteria for the Harold Alfond Grant? There are a few other grant options:
- A Maine account opened with at least a $50 initial contribution is eligible for a one-time $200 Initial Matching Grant.
- Accounts opened after January 1, 2011 are eligible for a NextStep Matching Grant. This grant provides a one-third match, up to $400, on contributions made to the account within the first 24 months.
- Accounts opened after January 1, 2011 are eligible for a one-time $50 Automated Funding Grant when any automated funding option is used.
To obtain these grants, a NextGen account must first be opened. For more information on enrollment and NextGen accounts in general you can visit the NextGen website or contact FAME directly at 1-800-228-3734. For more information on these grants visit the Harold Alfond College Challenge website.
The Alfond Grant represents free money for people willing to take the initial step to address the educational future of a newborn family member or friend. Anyone interested should pursue this program further while the enrollment period remains open.
If you would like to discuss further, please call your BNN advisor at 1-800-244-7444.
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