Topeka For the past year, Terri Friedline, an associate professor at Kansas University, has conducted research about college savings for low-income families, and how this changes the expectations that kids have for themselves and for their futures.
Last week, Friedline explained her research and that of the Assets and Education Initiative at the School of Social Welfare to the Kansas House General Government Budget Committee, which was considering a bill that would abolish the Kansas Investment in Developing Scholars (K.I.D.S.) program.
K.I.D.S. is a matching-grant program established in 2006 that encourages qualifying families to save by matching funds dollar-for-dollar, up to $600 per year. The money may be used for tuition, books, rent or any other approved expense. There is a maximum of 1,200 accounts allotted, and there are 988 in use this fiscal year.
“Encouraging college savings capitalizes on the aspirations of low-income children and changes their assessment of their futures,” Friedline said. “If you want to help students think about going to college, you give them a savings account. If you want them to save in the account, then you provide a match.”
But Scott Gates, who administers the program, said that while the state Treasurer thinks K.I.D.S. is an important incentive for people who use it, it is hard to ask taxpayers to fund it. According to the fiscal note that accompanies the bill, abolishing the program has the potential to save the state up to $720,000 in fiscal year 2014.
Gates also said the Treasurer would prefer for the program to be eliminated rather than forcing the state to decide to fund it one year and not the next. “We have to explain this to people each year,” Gates said.
During the hearing on House Bill 2317 on Thursday, Rep. Mark Kahrs, R-Wichita, said he had concerns that the program was being “gamed” by participants, who may enroll in college and then drop out to receive the total refund into their personal accounts.
Gates said he was not sure if this was happening, because while the state could pay the tuition bill directly to the college for the student, it could not receive the refund if a student were to drop out.
“It is probably an assumption that is consistent with other concerns about providing assistance to low-income families,” Friedline said. “There is this concern about fraud. I can’t speak to specifics about how often it occurs, but I would imagine if you wanted to game the system, there would be other, easier ways to go about it.”
Rep. Pete DeGraaf, R-Mulvane, asked Gates if program participants go deeper into debt as a result of starting the savings process but also having to take out student loans.
Gates said he did not have the data to know how often that situation occurred.
Another committee member questioned whether the families who qualify for the program were actually in need of the funds provided by the state.
“If this bill doesn’t pass, it would be for 2013, a family of four could qualify who earns $47,100,” said Rep. Virgil Peck, R-Tyro. “In some part of Kansas, that’s not that bad of a living at all.”
Along with Friedline, the United Way of Greater Kansas City, Kansas Action for Children and United Community Services of Johnson County opposed the elimination of the program.
The committee will work on the bill this coming week.