PORTLAND, Maine — All babies born as Maine residents will automatically be awarded a $500 grant for college, effective immediately, the head of the Alfond Scholarship Fund announced Thursday.

Previously, families whose babies qualified for the money had to sign up and open an account before the child turned 1 year old in order to take advantage of the scholarship. Though the intent of the program established by the late Dexter Shoe magnate Harold Alfond is to provide every Maine student with a college savings account, only 40 percent of eligible babies are enrolled.

In 2012, new mothers told the Bangor Daily News that one of the obstacles to enrolling in the program was the daunting amount of paperwork families had to fill out to open the Merrill Lynch account that was required to receive the money. Families needed to provide personal information, as well as the child’s social security number.

To address the gap between those eligible and those enrolled, the Alfond Scholarship Foundation, a nonprofit that manages the program, will open a giant account on behalf of all children born in Maine. Once each child turns 18, he or she can tell the foundation which higher education institution they plan to enroll in, and the foundation will give the money directly to the school. Babies born in 2013 who are not yet enrolled will also be automatically added to the program, but those born in 2012 or earlier will not be.

Each child in the program will receive a quarterly report on how his or her fund is doing. The statement will be accompanied by educational tips in literacy, math, health and financial literacy.

The Alfond Scholarship Fund works with the Finance Authority of Maine, an independent agency that manages the accounts. FAME will obtain birth records from the Bureau of Vital Records and keep the Alfond Scholarship Fund informed of the number of babies born.

“Since 2009, the Harold Alfond College Challenge has funded nearly 23,000 grants, investing almost $11.5 million on behalf of Maine’s children,” Greg Powell, chairman of the Harold Alfond Foundation, said in a prepared statement. “But it is not enough. To meet the future workforce needs of Maine’s economy, we need every baby to have the $500 Alfond Grant — not just the opportunity to receive it.”

The program expects to award $6 million worth of grants a year to 12,000 babies from 2014 on. Previously, when families had to opt into the program, about 5,000 babies a year received the benefit, according to Colleen Quint, president and CEO of the Alfond Scholarship Fund.

“We’re going to be able to do, under automatic enrollment, in two years what it took us five years to do,” she said.

Under the old model, about 80-85 percent of the foundation’s resources were devoted to recruiting and enrolling babies, Quint said. Now, the foundation will focus on what she called “education messaging.”

Quint said that means working with educators and producing literature for students with the intent of encouraging more young people in Maine to enroll in college.

“My experience with Maine families is they want that for their children, but they’re afraid they won’t be able to deliver it,” she said.

Families are still encouraged to open their own college savings accounts and add to the $500 grant.

The foundation also announced 10 partnerships with businesses such as Cianbro, Maine Health and Unum. Some of those businesses will match contributions that their employees make to a college savings account. Others will offer payroll deduction options, where employees will be able to add $25 of a monthly paycheck or more to the account. These partnerships are meant to encourage families to open their own accounts and contribute to them.

The scholarship program began distributing the money in 2009 with the goal of increasing the number of adults in Maine with a postsecondary degree. According to the U.S. Census Bureau, more than 63 percent of Maine residents over age 25 do not have a degree beyond a high school diploma.

Nell is the education reporter for the Bangor Daily News, but she will be helping out the political team by covering the 2nd Congressional District election this year. Before joining the Bangor Daily News...