BILL NUMBER: S10445REVISED 5/22/2026
SPONSOR: GIANARIS
 
TITLE OF BILL:
An act to amend the education law, in relation to establishing scholar-
ship programs within the New York 529 program
 
PURPOSE:
To authorize the NYS College Choice Tuition Savings Program (NY 529) to
develop, administer, and fund State-sponsored grant and scholarship
programs to provide a pathway for eligible children to save for future
education and apprenticeship expenses.
 
SUMMARY OF PROVISIONS:
Section 1 of the bill sets forth the legislative intent.
Section 2 of the bill amends Education Law section 695-a to expand the
purposes of the NY 529 program to include grant and scholarship
programs.
Section 3 of the bill amends the Education Law by adding a new section
695-h to authorize the establishment of scholarship programs within the
NY 529 program.
Section 4 of the bill amends Education Law section 695-c (2) which
relates to the memorandum of understanding between the Higher Education
Services Corporation (HESC) and the Office of the State Comptroller.
Section 5 of the bill amends Education Law section 695-e (12) to provide
authorization for the State to establish grant and scholarship programs.
Section 6 of the bill sets forth the effective date.
 
JUSTIFICATION:
This bill authorizes New York's 529 College Savings Program (NY 529
Program or Program) administrators to establish, administer, and fund
grant and scholarship programs within the existing framework of NY 529.
Under current law, municipalities and Internal Revenue Code 501(c)(3)
organizations are authorized to open scholarship accounts within the NY
529 Program; however, this authorization does not extend to the State.
This bill authorizes the State to establish grant and scholarship
programs modeled after these scholarship programs run by local govern-
ments and 501(c)(3) organizations, whereby the identity of grant and
scholarship beneficiaries would be determined upon disbursement.
NY 529, which is jointly administered by the Comptroller and the New
York State Higher Education Services Corporation (HESC), allows program
participants to save money for their selected beneficiaries' higher
education expenses. The Program enables residents of New York and other
states to benefit from the tax incentive provided for qualified state
tuition programs under the Internal Revenue Code of 1986.
The NY 529 Program has successfully facilitated initiatives with several
organizations that have opened and that administer child development
accounts within the NY 529 Program. Since 2017, NYC Kids RISE has devel-
oped a pioneering Program across New York City leveraging the NY529
Program. Every student in New York City public schools has an opportu-
nity to receive an NYC Scholarship Account which is invested in a NY 529
Direct Plan Account. Additional programs serve children in specific
neighborhoods or municipalities, but no program serves the entire state.
This bill seeks to remove statutory constraints that prevent the State
from opening or contributing funds to such child development initiatives
through grant funding. This bill would authorize the State to develop
and administer its own grant and scholarship programs within the exist-
ing framework of the NY 529, modeled after the NYC Kids RISE Save for
College Program, thereby providing a pathway for eligible children in
New York State to save for higher education expenses. This legislation
authorizes NY 529 to utilize administrative fees collected from the NY
529 Program Manager, the vendor that operates the Program on a day-to-
day basis, to fund such grant and scholarship programs, and to accept
donations into such grant and scholarship accounts from third parties
and any State appropriations.
This authority would afford New York's 529 College Savings Program a
powerful tool to increase awareness of the NY529 Program and to encour-
age New York residents to save for the pursuit of higher education
goals. Studies show and research confirms that children with dedicated
college savings accounts are more likely to attend college than those
without such accounts.1 One study by the Center for Social Development
of the Washington University in St. Louis showed that children with
college savings accounts were six times more likely to attend college
than those without an account.2 Further research has shown that low and
moderate income children with savings accounts of less than $500 prior
to reaching college age were over three times more likely to enroll in
college, and four times more likely to graduate from college, than chil-
dren with no savings account.3
This bill would authorize the Comptroller to develop and administer
grant and scholarship programs within the existing NY 529. Such State-
sponsored grant and scholarship programs are in the public interest as
they would provide a pathway for eligible children to save for future
education and apprenticeship expenses.
 
PRIOR LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
None to the State.
 
EFFECTIVE DATE:
This act shall take effect immediately. 1 Elliott, W., Ill, Choi, E.H.,
Destin, M. & Kim, K.H.(2011). The age-old question, which comes first? A
simultaneous test of children's savings and children's college-bound
identity (CSD Working Paper No. 1104). St. Louis, MO: Washington Univer-
sity, Center for Social Development.
2 Ibid.
3 Elliott, W., Ill, Song, H-a, & Nam, I, (2013). Small-dollar children's
savings accounts, income, and college outcomes (CSD Working Paper No.
13-06). St. Louis, MO: Washington University, Center for Social Develop-
ment.

Statutes affected:
S10445: 695-a education law, 695-c education law, 695-c(2) education law, 695-e education law, 695-e(12) education law