Elk Grove third-grader wins $100,000 for college

Third-grader Duncan Nakamoto wants to be a basketball player when he grows up, but he said he wouldn’t mind being a doctor “for a job.”

He now has $100,000 to help reach that professional goal.

Duncan learned he won the “Big Dreams Start Small” national scholarship contest when his photo flashed up on a screen during an assembly at Joseph Sims Elementary School in Elk Grove on Friday morning.

His father, Calvin Nakamoto, had submitted the photo and caption to the contest, sponsored by TIAA-CREF, which manages California’s college savings plan ScholarShare.

The contest received 3,000 entries, including the whimsical photo of Duncan surrounded by a globe and blackboard and other trappings of education. The caption submitted by the family states, “Duncan dreams of the possibilities. Astronaut? Doctor? Paleontologist? With big dreams and hard work we believe he can make it a reality.”

The windfall will go into a ScholarShare account, where it could grow substantially by the time Duncan graduates from high school in 2023.

“Our dream is for him to go to college and be successful,” said Calvin Nakamoto. “It’s a great relief. Being able to afford college is a dream come true.”

ScholarShare, which started in 1999, is administered by a seven-member investment board and chaired by the California state treasurer. The program has nearly doubled in size in the last seven years. The college savings program now has $5.7 billion in assets and 251,000 college savings accounts, according to the state treasurer’s office.

ScholarShare’s 529 accounts work for college savings much the same way that Roth IRAs do for retirement. Investors use money that has already been taxed to invest in ScholarShare. Families pay no taxes on investment earnings as long as money is withdrawn for qualified higher-education expenses, which include tuition, fees, books and room and board. The Nakamoto family will have to pay taxes on the $100,000 prize, however.

Friday morning, Duncan pumped his arms in elation when he learned he had won. The 9-year-old proudly held up the oversized check for his classmates to see during the school assembly.

“It was awesome,” he said of the surprise.

The adults in the crowd had kept the secret well, telling the students only that there would be a “Be Knowledge and College Bound” assembly that morning.

TIAA-CREF gave other students goodie bags filled with treats and a book, as well as information about how their parents could open a ScholarShare account. They also gave the school $5,000 to buy books for classrooms.

“He’s an incredible student, highly inquisitive, resourceful and has a lot of humor,” said Duncan’s teacher, Shelly Stoller. “He’s a great kid.”

Children who have a dedicated college account are more likely to attend college than those who don’t, said Arlene Greene, executive director of ScholarShare.

“It’s a great message,” said school board member Bobbie Singh-Allen. “If you start at this age and you put away a little bit, that pot grows.”

It currently costs about $13,929 a year to fund all costs associated with attending community college, including living expenses, according to the state treasurer’s office. It costs $22,488 to attend a California State University campus, $32,400 to attend a University of California campus and $50,000 to attend a private four-year university.

While the Nakamotos’ $100,000 likely will grow through investments, college costs have outpaced inflation in the past and are expected to rise over the next nine years before Duncan heads to college.

“I congratulate Calvin for his creativity in winning the contest and his foresight in planning now for his son’s future,” said state Treasurer Bill Lockyer in a statement. “I urge parents and grandparents everywhere to begin saving for college as early as possible. A college education helps a child succeed and prosper in an increasingly competitive economy.”

California remains one of only seven income-tax states that does not offer a tax break on contributions to 529 accounts, according to Greene. Lockyer is sponsoring Assembly Bill 1956 this year to establish a tax credit equal to 20 percent on the first $2,500 in contributions. The $500 maximum annual credit would be available to the vast majority of households – single filers with adjusted gross incomes of $100,000 or less and joint filers with AGIs of $200,000 or less.

The promotion is one of many that TIAA-CREF has launched to bring awareness to the scholarship program. Recent promotions have included an essay contest in partnership with the Golden State Warriors, a Share Your Story contest in which entries are posted on Facebook and a “Reading Makes Sense” contest in partnership with California Public Libraries. Prizes vary from $529 to $5,000 in contributions to college savings accounts.

Duncan’s $100,000 prize is the single largest yet, according to Doug Chittenden, executive vice president of TIAA-CREF, which manages 11 college savings plans nationwide. He said the promotion has been “very successful” and has led to a bump in the number of parents opening college savings accounts.

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