Kindergarten to College (K2C) Seed Accounts are opened and maintained by United Way California Capital Region (UWCCR) and the City of Sacramento. The K2C Seed Account will be maintained by UWCCR for the benefit of individual students enrolled in participating Sacramento area schools. The K2C Seed Account will receive any incentive funds from the K2C program and accrue interest based on ScholarShare’s Passive Enrollment Year Investment Portfolio. To earn the matching incentives, families must open their own Family-owned ScholarShare 529.
Both the K2C Seed Account and the Family-owned Account are intended to be deposit only accounts. Families may request funds from the K2C Seed Account for qualifying educational purposes. If necessary, families may withdraw funds from the Family-owned Account before the student beneficiary is of age to use on non-educational expenses, but those funds will then be subject to taxes detailed below.
Seed Account Information
K2C Seed Accounts will be opened and maintained by UWCCR and the City of Sacramento along with ScholarShare 529. The accounts will grow through contributions made or authorized by the student and/or their parent/guardian and on an annual basis based on the associated investment portfolios. Additional contributions, matches, and/or incentive awards to the K2C Seed Account may only be provided by the K2C program. Any other funds may be provided by the families to the Family-owned Account. Students must be enrolled in a participating Sacramento area school in order to receive K2C Program contributions, matches or incentives. All K2C Seed Account assets will be held by UWCCR in accordance with K2C program rules. For any year the student is not enrolled in a participating school, any funds in the K2C Seed Account will remain active for use by the student or parent/guardian and will continue to accrue interest based on the Passive Enrollment Year Investment Portfolio. However, the Seed Account will not be eligible for additional match or incentive awards from the K2C Program. All other program rules will still apply. The K2C Seed Account balance and transaction history will be available online for review by the student and their parent/guardian.
There is no annual or one-time limit to the amount one may contribute to the Family-owned Account. Contributions to any ScholarShare account can be done by check, automatic contribution plan (e.g. direct deposit or payroll deduction), or by electronic funds transfer.
Requests for Qualified Withdrawals may be made to the K2C Program Administrator for qualified higher education expenses such as tuition, mandatory fees, books, supplies, and equipment required for enrollment or attendance, or for any other eligible purpose that is in accordance with federal qualified tuition plan (529) rules. Eligible institutions include accredited private colleges, public universities, community colleges, graduate schools, and trade schools that qualify for federal student aid.
What if I have a child who isn’t in kindergarten but I still want to open a 529 account for them?
We can help you open up a ScholarShare 529 account for your child so you can start saving for their postsecondary education. The K2C Seed Accounts, however, are meant specifically for kindergarten students in our participating schools. Therefore, the incentives listed above are only available to those students. Regardless, our program encourages families to actively invest in their own 529 accounts and that money can be used for the higher education of any qualifying family member. This means families could roll-over funds from their own, Family-Owned 529 account to other children if necessary. For more information of incentives that ScholarShare itself offers, check out their Matching Grant Program.
How are the Kindergarten to College Accounts managed?
The Kindergarten to College Savings Program is administered in collaboration between United Way California Capital Region and the City of Sacramento.
K2C savings funds are held within a master account in ScholarShare 529 Plan, which operates as a qualified tuition program under Section 529 of the Internal Revenue Code. The K2C master account is subdivided and invested in the Passive Enrollment Year Investment Portfolio with ScholarShare 529. These portfolios are managed by TIAA-CREF Tuition Financing, Inc. Enrollment Year Investment Portfolios are designed to become more conservative as the children near their anticipated college enrollment date, offering participants an opportunity to grow savings while the child is younger and better safeguard savings against market fluctuations when the child nears college age.
Can I manage or make deposits to the K2C Seed Account?
All changes to the K2C Seed Account, including any incentive or matching awards, will be completed by UWCCR and the City of Sacramento who administer the K2C Program. As such, families may not make direct contributions to the K2C Seed Account. Families are encouraged to claim the K2C Seed Account so they may monitor the growth of the account. Families only need to create a username, password, and log in once to claim the account. This can be done at a K2C Kickoff Event, Financial Workshop, or online at yourlocalunitedway.org/k2c.
What should I do if I move?
Families are encouraged to keep their address information current with the program. The program may receive periodic address updates from the school districts, which will be used to update addresses as necessary. If you move and change schools away from our participating schools, the Seed Account funds remain, the student remains the beneficiary, and the funds can still be used in accordance with the program rules. However, only students enrolled in participating schools can receive new incentive funds. To manually update contact information, please log into the K2C Outcome Tracker portal.
How do I use the funds saved in a K2C Seed Account?
When your student enrolls in an eligible postsecondary institution and wants to use the funds in their K2C Seed Account, the student must contact UWCCR to request a distribution. The student will be required to complete a Distribution Form. Once approved, the account owner will initiate payment from the program and send the payment directly to the institution of higher education for the benefit of the student.
Eligible institutions include thousands of colleges, universities, and technical/vocational schools across the nation. Eligible schools are defined by Section 529 of the Internal Revenue Code and generally include any postsecondary school that is eligible to participate in federal financial aid programs.
The money held in the program for each student- the initial $25 deposit, interest earnings, and any matching grant or community dollars- may not be used for any other purpose than to pay for qualified costs related to higher education. Monies held in the K2C accounts will be paid directly to the institution by your student, as described above.