Concern About College Savings On The Rise
Two-thirds of parents and grandparents are very (29%) or somewhat (37%) concerned that continued market volatility will affect their college savings, finds a new survey by Harris Interactive for Alliance Fund Distributors, Inc., New York.
Alliances annual college financial preparedness survey found that while respondents expect to save the same amount ($20,000) as they did in last years survey, people have begun investing in a childs or grandchilds college education much earlier–when the child is about four years old, a significant change from 11 years old in 2001.
“The survey demonstrates heightened concerns about the ability to adequately save for students future college expenses, given the ongoing market slump,” says Richard Davies, executive vice president, Alliance Fund Distributors.
College savers also say they want as many choices as they can get when considering 529 plans. Seventy-two percent of survey respondents said protecting their principal against market volatility is the feature they want most from any 529 plan. Participants also said they want to be able to create a custom portfolio of mutual funds (70%), select aged-based portfolios that adjust automatically as the child grows (69%) and choose from among more than 10 investment options (61%).
Seventy-one percent also said they want to be able to invest through payroll deductions, while 62% said they thought it is important to be able to invest with the help of a financial advisor.
For the survey, Harris conducted phone interviews of more than 1,000 U.S. residents over age 18 between July 18-21.
Reproduced from National Underwriter Life & Health/Financial Services Edition, September 16, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.