HARTLAND, Maine — More states are increasingly turning to children's savings accounts as a way of promoting a "college-going" culture and reducing student loan debt over the long term.
Maine is recognized as a national leader on this front.
But getting large numbers of families in the state, especially low-income ones, to save for their youngest members has been a challenge.
Lew Elliot has always grown a nice-size garden at his sprawling homestead in Hartland. But Elliot, who jokes he should list "survivor" as his occupation on his yearly tax return, says he'd never thought about selling vegetables to his neighbors until after his grandkids came along.
"Right now, we're kind of in squash season," he says. "We harvested about 300 bulbs of German garlic this year. We've got some really nice onions. New red potatoes. That's the last of those that I've dug."
There's a big box of summer squash, bright yellow and luscious looking, sitting inside the farm stand at the edge of Elliot's driveway. At the end of each day, the stand's two beneficiaries — Emerson, 3, and Bentley, 5 — head out with their grandmother to see how much money has piled up in the cash box.
"We took 'em with us to the bank, when we just went in," Elliot says. "And they're very understanding there. Because when we bring in money, I mean it's one dollar bills crumpled up that we try to flatten out. A lot of change. But the kids are involved with the whole process. Of course, they probably don't understand the numbers. They don't understand that Yale is $45,000 a semester and we're a long way from sending them there."
This little vegetable stand is going to help put Emerson and Bentley through college someday. The grandparents started saving five years ago, shortly after Bentley was born, and the family signed up for NextGen, a new 529 college savings account offered by the state.
"Right when we were in the hospital, they gave us paperwork about it," says Gretchen Lane, Elliot's daughter and Bentley and Emerson's mom. "And you just take it home and fill it out. It was really easy. If you had questions, you could call and they would help you with any questions you had."
And if you went ahead and signed up for a NextGen 529 account, you would also get a $500 starter deposit, courtesy of the Harold Alfond College Challenge.
The grant program, launched in 2008, required families to open the college savings account to get the money. In its first five years, the Alfond Challenge awarded a little over $11 million to just under 23,000 Maine families.
That amounts to "ten times that national average, in terms of sign-up rates for college savings," says Colleen Quint, who heads the Alfond Scholarship Foundation. "So a great outcome, in a lot of ways, but our hope was to really capture all the kids."
Instead, roughly 40 percent of eligible families participated. So last year, the foundation changed the rules. Now all babies born in Maine — as of Jan. 1, 2013 — receive the $500 grant whether their families sign up for a NextGen account or not.
Getting more families to open a 529 remains a goal of both the Alfond Scholarship Foundation and the Finance Authority of Maine, which administers the NextGen program. But right now, despite the change to the Alfond Challenge rules, just 33 percent of eligible families have actually opened college savings accounts with FAME.
"We have to dispel the myth that saving for college somehow hurts your eligibility for financial aid," says Martha Johnston, who heads up education initiatives for the Finance Authority of Maine. It's a concern she hears a lot.
She says it's much better for families to plan ahead for their children's college educations, even if it means contributing tiny amounts every so often. But in Maine, where many young families are barely scraping by, parting with even a few dollars a month can seem like a big sacrifice.
"It can be challenging," Johnston says. "At the end of the day, regardless of the background of that parent, everyone wants to do what's best and right for their child. And I think that that's the core message we need to get across."
She says FAME is continuing to do everything it can to get the word out about the benefits of NextGen and the Alfond Challenge. But whatever struggles the state has had attracting more families to its college savings initiatives, Maine is still considered a leader in this area, a state that many others across the nation are trying to emulate.