February 9, 2011

More High School Students Take Responsibility for College Costs

Use of 529 plans doubled since 2010, but still low

The College Savings Foundation released its second annual How Youth Plan to Fund Collegereport Wednesday, which found 72% of high school students believe it's their responsibility to fund their educations. The survey of college-bound 16- and 17-year-olds also found that 65% are planning to use their own funds to pay for college, a continuation of trends revealed in the 2010 survey, according to the Foundation.

The percentage of students using 529 college savings plans doubled from 2010 to 2011, but is still low at 16%. Just 68% of students are using "plain vanilla" savings accounts, down from 80% in 2010.

Students in 2011 plan to contribute more of their own funds, though. Fifty-eight percent of respondents said they will pay for more than one-quarter of their education costs, up from 52% in 2010. The percentage of students who will cover more than half of their costs increased from 12% to 18%.

Students are already on the right track, the report found. Almost three-quarters (73%) say they will save for college and 48% have already started. Of those, 69% already have more than $1,000, compared with 62% who had saved as much last year. The percentage who have saved more than $5,000 increased as well, growing from 19% in 2010 to 23% in 2010. Of the students who have decided to save for school, 52% have gotten a job, up from 48% in 2010, and 66% are passing on expenditures like electronics, cars or vacations.

In addition to saving more, students are also looking at less expensive schools, with 51% looking at public universities rather than private schools or community colleges. Just 16% of respondents said they are looking at private universities, down from 18% last year and 19% are looking at community colleges, dropping from 22% in 2010.

Students are slightly more attuned to the cost of education in the 2011 survey. Almost 80% said the cost of education influenced their plans, up slightly from 77% in 2010. Eighty-three percent said the cost contributed to their choice of school, down from the 86% who said cost was a factor in their decision in 2010.

The percentage of students expecting financial aid fell slightly, though, dropping from 85% to 81% in 2011. Of those, 47% definitely expect to receive aid, compared with 34% who aren't sure.

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