Foundation Establishes College Savings for Newborns

Officials at the Harold Alfond Foundation, in Portland, Me., said they will soon begin a program at two Maine hospitals that will establish a $500 college savings account for each child born at the institutions, reports the Portland Press Herald.

The money will be invested in college-tuition savings accounts managed by the Finance Authority of Maine. Money invested in the accounts will not be taxed as long as it is used for college tuition.

Mr. Alfond, who founded Dexter Shoes and was a big shareholder in Berkshire Hathaway, died last month at age 93.

Foundation officials said that the investment will grow to $2,000 in 18 years, based on 8 percent interest. If the money is matched by $50 a month from a child’s family, the account would then be worth $25,000 by the time the child reaches age 18.

The donations will cost the foundation more than $7-million a year if current birth rates continue.