• Original Reporting
  • Sources Cited
Original Reporting This article contains new, firsthand information uncovered by its reporter(s). This includes directly interviewing sources and research / analysis of primary source documents.
Sources Cited As a news piece, this article cites verifiable, third-party sources which have all been thoroughly fact-checked and deemed credible by the Newsroom in accordance with the Civil Constitution.
A mom holds her toddler's hands as she walks across a low wall.
Lauren Osga walks behind her daughter outside Clayton Early Learning in Denver Tuesday. Osga opened up a 529 college savings account through the state-run nonprofit CollegeInvest to get a head start on saving for higher education. (Chloe Anderson, Special to The Colorado Sun)

Lauren Osga and her husband are still slogging through $7,000 in student loans about a decade after they earned their degrees, and so they know firsthand that they can’t begin saving for college for their daughter a moment too soon.

Even if she’s still a few years away from preschool.

“It’s incredibly overwhelming to think about affording higher education,” Osga said. “We know we don’t have incredible means to be saving tens of thousands of dollars.”

The Denver resident is one of thousands of Colorado parents who began saving for college with help from the state right as they expanded their family, opening a 529 savings plan through a program launched almost four years ago by the state-run nonprofit CollegeInvest

The organization rolled out its First Step program less than three months before the pandemic began, offering $100 to every newborn or adopted child to help their families begin the daunting task of saving for the ever-rising costs of higher education. The program — created by 2019 legislation — has shown promise, even as mindsets around higher education are shifting: As of last week, more than 10,000 Colorado families have signed up for the First Step program, with CollegeInvest committing $1 million to college savings accounts.

The rush of families racing to save money during their child’s youngest years coincides with a dip in undergraduate college enrollment during COVID, with the National Center for Education Statistics reporting undergraduate enrollment 15% lower in fall 2021 than in fall 2010 and 42% of that drop hitting colleges and universities during the pandemic.

A toddler crouches down while holding a bucket with a Halloween pumpkin face on it. Her mother crouches next to her.
Lauren Osga kneels down with her daughter outside Clayton Early Learning in Denver. She is one of more than 10,000 Colorado families to take advantage of CollegeInvest’s First Step program, which allows families to open an account at no cost when their child is born or adopted and receive $100 in state funding to kick start their savings for college. (Chloe Anderson, Special to The Colorado Sun)

That’s why Angie Paccione, executive director of the Colorado Department of Higher Education, said she was “almost stunned” by the volume of parents creating college savings accounts for their kids.

“When you have an initiative that meets the needs of Colorado families, they will surprise you in the uptake,” Paccione said.

A 529 account — free to open — is a tax-advantaged savings plan that allows families to save for education expenses with the help of states, state agencies or educational institutions. The funds invested grow free of state and federal taxes, and every dollar can be deducted from state taxes. 

Parents can open an account even if they don’t have any money to personally invest in it when their child is born or adopted and benefit from the state gift, which has grown to $110 as the cost of living has increased. They can then watch that money grow over time.

“The earlier you save, the more you can leverage the compound interest,” CollegeInvest CEO Angela Baier said, explaining that families can earn interest for their child’s education rather than pay interest on student loans.

Compound interest increases investments over time as those investments continue to accrue interest.

The money saved can help fund a student’s higher education at public and private colleges, universities, community colleges, vocational schools and apprenticeship programs in any state.

“Whatever option they want, you will be able to have the funds to make that dream come true,” Paccione said.

CollegeInvest, which is an enterprise fund and does not receive any taxpayer money, allows families to sign up for a First Step program account any time in the first five years of their child’s life. The original funding for the First Step program came from a fomer legacy scholarship program run by CollegeInvest, Colorado Early Achievers Scholarship Program, that sunsetted after having been funded through federal student loan proceeds. A leftover balance of about $12 million from that scholarship program supported the start of the First Step program.

The nonprofit introduced a separate incentive in hopes of encouraging more families to “get good habits going,” Baier said, matching family contributions to the college savings account by up to $500 a year for up to five years for a maximum benefit of $2,500.

That extra reward has funneled more than $5 million from the state agency to the savings accounts of thousands of families this year, according to a news release from CollegeInvest. Meanwhile, families with a First Step program account have saved an average of $3,292 of their own money within the first year of their account.

A similar but separate matching grant program that the nonprofit has run for at least 15 years is geared toward low- and middle-income families, also matching up to $500 each year for five years. Colorado families must sign up for that program by the time their child is 8 years old. CollegeInvest has pumped $2.7 million into the accounts of 3,078 low and middle-income families this year, according to the news release.

That matching program has an application period, which each year opens in October and ends Dec. 31.

Baier noted that saving for college has more than financial boons. When a kid knows that money is being socked away for their future education, they’re more likely to pursue a post-high school credential, she said.

A mom holds onto a toddler's hands as she walks in front of an elementary school
CollegeInvest’s First Step program offers matching incentives to maximize the amount of money in families’ 529 college savings account. (Chloe Anderson, Special to The Colorado Sun)

“It really changes the dinner conversation that someone believes in you, and it really sets the expectations,” Baier said.

And it gives families overwhelmed by the prospect of paying for a college education more momentum in the challenge to save, Paccione said.

“Most families cite financial hardship as reasons why their children don’t go onto postsecondary education,” she said. “So the fact that the state has the First Step program … gives them the hope and the opportunity to invest rather than to borrow.”

Osga, whose daughter turns 2 in January, said starting a college savings account through CollegeInvest has sparked an opportunity for her and her husband, who both work in nonprofits, to significantly increase how much they save each month.

“I definitely see it opening opportunities for our daughter so that she doesn’t step into the burden of student loan debt immediately,” she said, “or that there’s at least some relief for her with that burden.” 

For more information on starting a CollegeInvest savings account, visit CollegeInvest’s website.

Erica Breunlin is an education writer for The Colorado Sun, where she has reported since 2019. Much of her work has traced the wide-ranging impacts of the pandemic on student learning and highlighted teachers' struggles with overwhelming workloads...