Teenagers are getting more involved in saving for their own schooling, a survey by The Private College 529 Plan found. Overall, 67% said they were very or somewhat involved in the planning process. Seventy-eight percent have researched how to pay for their own education and 54% have contributed to their savings fund. Of the 54% who have contributed to their own fund, 15% do so on a regular basis.
“Gifts from grandparents and family members can be monetary and sometimes find their way to college savings plans,” Nancy Farmer, president of Private College 529 Plan, a prepaid 529 plan, said, noting 17% of respondents contribute gifts they receive to their savings fund.
The survey found girls and 17-year-olds were more likely to be involved in the planning process than boys or younger teenagers. It also found 81% of black teenagers were involved in the planning process, compared with less than two-thirds of Hispanic or white teenagers.
The survey asked teenagers to rank their sources of education on college savings planning. Parents were the most highly rated source of education. Nearly half said they were an “excellent” source, and 81% said they were excellent or good. Less than a quarter gave their guidance or college counselors the highest rating, but about half said they were at least good enough.
In typical teenage fashion, they thought they knew more than their parents about the best way to save for school. Nearly three-quarters said they were confident about their knowledge of college savings strategies, although only 14% could say what a 529 plan was.
The survey found that teens’ confidence fell as they got older, though. More than a third of the 13-year-olds surveyed said they were very confident in their understanding of college savings, but that had dropped to 19% of 16- to 17-year-olds.
“As they get closer [to choosing a school], 17-year-olds are looking at specific schools and specific dollar amounts. It’s a more concrete reality,” Farmer said.
Sixty percent expect to take out loans. The survey didn’t ask deeper questions related to respondents concerns about debt, but Farmer noted that this is the first of what will be an annual survey. “There’s certainly an opportunity to explore more next year,” she said.
When considering where to go to school, status and location were the most important factors, although cost was only slightly less important than location. Unsurprisingly, cost was far and away the most important factor for parents.
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