The financial services firm Edward Jones released the results of a survey today that found 62% of Americans has no idea what a 529 plan was despite May 29 being â529 day'.
The survey was conducted by Opinion Research Corporation and had 1,006 respondents. It reinforced the growing problem that many Americans are facing with the rising costs of higher education. Tuition costs of four year degree at public colleges rose 8% from 2010 to 2011 and the rapid increase is expected to continue. The 529 plan was created in 1996 and is a tax advantage savings plan designed to encourage preparation for college costs.
"With the cost of college education rising annually,, early investing through tools like 529 plans are really a great option for parents and family members who want to help offset the costs for their students," said XXX. "States offer a variety of state-sponsored funds and it can be confusing for parents to choose the right option. Taking the time to talk to a financial advisor can help families identify the right options and get their future education costs on track."
The survey found that awareness of 529 plans had a direct correlation with the wealth level of the respondent. Respondents making sub $35,000 a year had a 27% identification rate, 57% of those making $75,000 to $100,000 knew what the plans were while this figure rose to 62% for those making more than $100,000 a year.
The survey also found a correlation between having a degree and being aware of the plans. 53% of respondents with a college diploma correctly identified the plans while the figure dropped to 29% for those whose education ended at high school or earlier.
While respondents without children were least likely to know what a 529 plan, the survey found that knowledge of 529 plans increased based on the youngest age of a child of the respondent. This indicates that awareness of the need to plan for college may be on the increase.
There was also some regional difference in awareness of the 529 plan with respondents in the Northeast of the country being the most savvy at 45% while respondents in the West were the most oblivious at 33%.
May 29 will be Save for Education Day across Edward Jones branches nationwide. The aim is remind communities about the importance of setting education savings goals. Families are encouraged to stop by their local branch to learn more about planning for their children's educational future.