Saving early is one of the best ways to prepare for the cost of college — and some states are making it even easier by offering families free money to get started. Through special programs tied to 529 Savings Plans, parents can receive grants or matching contributions that help grow their child's college fund. These initiatives are designed to encourage families, especially those with lower incomes, to begin saving sooner. Even small contributions can make a big difference in a child's future, research shows.
Here's a look at where these programs are available and how they work.
States and cities providing free money for college
Colorado
Program: CollegeInvest Direct Portfolio, CollegeInvest Stable Value Plus, CollegeInvest Smart Choice, CollegeInvest Scholars Choice
How much you'll earn: Through the CollegeInvest Matching Grant Program, account owners will receive up to $500 in matching funds each year for up to 5 awards.
Age limit to qualify for the grant: Must be 8 years old or younger at the time of application
Income restriction: None
Connecticut
Program: Connecticut Higher Education Trust (CHET) and CHET Advisor 529 Plan
How much you'll earn: By opening a CHET account, you'll automatically receive $100 through the CHET Baby Scholars program.
Age limit to qualify for the grant: Babies must be less than one year old. For adopted children, they must have not reached their one year adoption anniversary.
Income restriction: None
Kansas
Program: Learning Quest, Learning Quest Advisor
How much you'll earn: The K.I.D.S. Matching Grant Program will match up to the first $600 of your contribution with a minimum contribution of $100. Applications are first-come, first-served.
Age limit to qualify for the grant: None
Income restriction: For low-income residents making below 200% of the federal poverty level.
Louisiana
Program: START Saving Program
How much you'll earn: State will match up to 14% of your deposits every year with Earning Enhancements.
Age limit to qualify for the grant: None
Income restriction: Your Earning Enhancement Rate depends on your income level.
Massachusetts
Program: U.FUND College Investing Plan
How much you'll earn: Through the BabySteps Savings Plan, beneficiaries can earn $50 when they open an account.
Age limit to qualify for the grant: The child must be born or adopted after January 1, 2020.
Income restriction: None
Maryland
Program: Maryland College Investment Plan
How much you'll earn: Depending on your annual income, you're eligible for either $250 or $500 if you make a minimum contribution (which also varies by income level) of either $25, $100 or $250. Beneficiaries are eligible for two state contributions a year, but they are not guaranteed.
Age limit to qualify for the grant: None
Income restriction: The minimum contribution and state contribution depends on your annual income. For joint filers, your annual income must be less than $175,000 and for individual filers, your annual income must be less than $112,500.
Maine
Program: NextGen 529 Direct Series and NextGen 529 Select Series
How much you'll earn: You'll get matching contributions when you open the account, set up automatic contributions and make them every year. When you open the account and add $25, you'll get a $100 grant. After you've set up and made six consecutive automatic contributions (must be made at least quarterly), you'll get another $100. And lastly, if you make contributions each year, you'll get a 30% matching grant of up to $300. For example, if you contribute $600 a year, you'll get $180 and if you contribute $1,000, you'll get $300.
For children born after January 1, 2013, they can receive the Alfond Grant — a $500 grant for college.
Age limit to qualify for the grant: None
Income restriction: None
Nevada
Program: Future Path 529 Plan
How much you'll earn: Through the Silver State Matching Grant, you'll earn up to $300 in matching grants per year for up to five years for a total of $1,500.
Age limit to qualify for the grant: The beneficiary is 13 or younger as of December 31 of that year
Income restriction: Household income is less than $74,999
New York City
Program: NY'S 529 College Savings Direct Plan, Amalgamated Save for College Bank Account
How much you'll earn: NYC Kids Rise will automatically give you $100 for opening a NY Scholarship account. If you activate the account, you'll get $25. Afterwards, if you open a college savings account, you'll receive another $25, and after making a $5 deposit in your account, you'll receive an additional $25. Lastly, the program will match contributions, made between first and fifth grade, up to $100. In total, you're eligible for $300 from the program.
Age limit to qualify for the grant: Available to kindergartners enrolled in an NYC public school (and participating charter schools)
*Note: This is not available to all New York State residents.
North Dakota
Program: College SAVE
How much you'll earn: With the baby match, you'll get a $200 match. For the Kindergarten Kickoff Match, you'll get a $100 match. The BND match is $300.
Age limit to qualify for the grant: For the baby match, your child needs to be less than one year old. For the Kindergarten Kickoff Match, your child must be less than 7 years old. For the BND match, the child must be less than 16 years old.
Income restriction: For the BND match for joint-filers, your annual adjusted gross income must be below $150,000 and for single-filers, less than $100,000. There are no income requirements for the Kindergarten Kickoff Match or the Baby Match.
Oregon
Program: Oregon College Savings Plan
How much you'll earn: Through the Baby Grad Program, you'll receive a one-time contribution of $100. For the Kinder Grad Program, you'll also receive a one-time contribution of $100. Through the Oregon Scholars program, beneficiaries will receive matching funds if they attend partner schools such as Linfield University.
Age limit: For the Baby Grad Program, your baby must be under one year old. For the Kinder Grad Program, the child must be five or six years old.
Income restriction: None
Pennsylvania
Program: PA 529 Guaranteed Savings Plan (GSP), PA 529 Investment Plan (IP)
How much you'll earn: Through Keystone Scholars, beneficiaries will receive a starter deposit of $100.
Age limit to qualify for the grant: Babies must be born after January 1, 2019.
Income restriction: None
Rhode Island
Program: College Bound Saver
How much you'll earn: CollegeBound Starter offers a $100 grant to babies born or adopted in Rhode Island on or after July 1, 2021.
Age limit to qualify for the grant: Available to children born to or adopted by Rhode Island families on or after July 1, 2021. However, in order to receive the grant, the child must be younger than one year old.
Income restriction: None
Tennessee
Program: TNStars College Savings
How much you'll earn: Through the Tennessee Investments Preparing Scholars (TIPS) program, you can receive $100 for every $25 you can contribute each year. Beneficiaries can receive a match of up to $500 per year so in order to max it out, you'll have to contribute $125 per year. The lifetime maximum match is $1,500.
Age limit to qualify for the grant: Children must be 14 years old or younger.
Income restriction: For low-income families so it depends on your annual adjusted gross income.
West Virginia
Program: SMART529 WV Direct, SMART529 Select
How much you'll earn: Through the Bright Babies Program, babies will receive a $100 contribution.
Age limit to qualify for the grant: Any baby younger than one year old.
Income restriction: None
What is a 529?
A 529 plan is a tax-advantaged savings plan designed to help families prepare for education costs. Money you contribute can be invested in options like mutual funds or age-based portfolios and the earnings grow tax-free. Withdrawals also aren't taxed when they're used for qualified expenses like tuition, room and board and textbooks.
One common misconception is that 529 accounts significantly reduce financial aid but only about 5.64% of the account's value is factored into aid eligibility. While there are no annual contribution limits, most states cap the total balance at more than $200,000 and many offer state tax deductions or credit for contributions. Together, the tax benefits, investment growth and flexibility make 529 plans one of the most effective ways to save for education.
Benefits of a 529
A 529 plan offers several perks that make it a beneficial tool for savings for education:
- Tax-free growth - Investments grow tax-deferred and withdrawals aren't taxed if used for qualified education expenses.
- State tax benefits - Many states offer deductions or credits for contributions.
- Flexible use - Funds cover tuition, room and board, books, supplies and some K-12 expenses
- Parental control - You remain in charge of the account, even when the child turns 18.
- Minimal impact on financial aid - Only a small portion of the account is considered in aid calculations.
- Transferable - If one child doesn't use the funds, the account can be transferred to another family member.
Other ways to invest for college
If you don't live in one of the above states, there are still other options to open up a 529 account for your child. In fact, you're not limited to your own state's plan, meaning you can shop around for a 529 account that offers the lowest fees and best investment choices. That said, you must be a resident of the state to qualify for the above grants or matching contributions.
And remember, robo-advisors like Wealthfront also offers the option to open a 529 savings plan for your kid(s). Robo-advisors will create a custom portfolio based on your investment timeline and risk level and will automatically adjust your investments as the market changes.
529 FAQs
Are there restrictions by state?
Yes — each state sponsors its own 529 plan with different rules, investment options and potential for tax benefits, though you can usually open a plan in any state.
Are there contribution limits?
There are no annual limits but most states cap total balances at $200,000 to $500,000 per beneficiary.
What happens if a child doesn't go to college?
You can transfer the funds to another family member or yourself. If used for non-education expenses, withdrawals are subject to taxes and a 10% penalty on earnings.
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Correction: The article has been updated to reflect that Wealthfront offers a 529 savings plan. A previous version of the article incorrectly stated that Betterment has a 529 savings plan.
