The college savings market could double in size over the next 5 years, according to an analyst at Financial Research Corp.
The total college savings market could reach $937 billion by 2014, with $247 billion of the total invested in Section 529 college savings plans, writes Bridget Bearden of FRC, Boston.
Today, the college savings market has about $487 billion in assets, with $88 billion invested in 529 plans.
Other Bearden observations:
- Most families with 529 plans have annual household incomes between $75,000 and $150,000.
- About 40% of 529 account owners bought directly from state 529 program administrators rather than through advisors.
- Prospective 529 plan investors want low costs and low-risk investment options.
Many 529 plan vendors are lowering "all-in" plan costs, and some are responding to an increased fear of risk by adding ultra-conservative investment options, such as bank products, Bearden says.
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