College costs are going up, but fewer people know about college-savings plans than last year, according to a recent Edward Jones survey.
The May poll of 1,000 adults found that 70% of Americans do not know that 529 plans are a college-savings tool, up from the 63% level in 2012.
In other words, only 30% of Americans can correctly identify a 529 plan as a college savings tool from among four potential options vs. 37% two years ago.
“Despite the fact that the average cost of an in-state public college totaled $22,828 in the 2013-2014 academic year, we have seen a downward trend in 529 plan awareness over the past three years,” said Greg Dosmann, principal with Edward Jones, in a press release.
“It seems counterintuitive that the costs of higher education continue to rise while awareness for a vehicle that can make this cost more manageable continues to decline,” Dosmann explained. “We like to remind our clients that starting a 529 plan savings program as early as possible will help ease the burden as children near college age.”
There were sharp dips in awareness across the country.
In the Northeast, the level of 529 awareness stands at 39% in 2014 vs. 45% in 2013, while in the Midwest the level of 529 knowledge is 30% this year, down from 36% in ‘13.
When looking at household income, about 32% of those earnings $50,000-$75,000 know about 529 plans. Last year, this figure was 42%.
By age, respondents 65 and up have the lowest levels of awareness: 18%.
“Grandparents represent an opportunity when it comes to managing the cost of college,” said Dosmann. “Talking to grandparents about participating in 529 plans is an excellent way to build assets in a portfolio – and for the grandparents, it’s fulfilling and there may be tax advantages as well.”
Legg Mason, which surveyed 1,000 grandparents with at least $50,000 income in November 2013, found that about two-thirds were saving or planning to save for their grandchildren’s future education. Plus, 40% said they planned to use 529 college savings plans, the survey found.
St. Louis-based Edward Jones says its 12,000 advisors and its branches nationwide will recognize Thursday, May 29 as “Save for Education Day.”
On that day, branches will host events to remind families about the importance of setting education savings goals.
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