The Harold Alfond Foundation in Portland, Maine, has announced the launch of the Harold Alfond College Challenge, which will establish $500 college savings accounts for every child born at MaineGeneral Health hospitals in Augusta and Waterville, the Portland Press Herald reports.
The program, believed to be the first statewide higher education grant program, will launch on January 1 at MaineGeneral and will be expanded statewide by the end of the year. The $500 in each account will be invested in NextGen college tuition savings accounts managed by the Finance Authority of Maine and will grow tax-free if used for college tuition. Based on an 8 percent rate of return, the initial $500 will grow to $2,000 in eighteen years; if matched by $50 monthly contributions, individual accounts would have more than $25,000 in them by the time a child reaches the age of 18.
The donations will cost the foundation more than $7 million a year if the state's current birthrate remains steady. Harold Alfond, the state's leading philanthropist, died in November at the age of 93.
"This ambitious program represents Harold Alfond's deep affection for the people of Maine," said Alfond Foundation board chair Greg Powell, "and his firm belief that every citizen in the twenty-first-century has the right and responsibility to higher education."