More than half of families whose children intend to go to college are saving the same amount or more for college than they did last year, despite the economic downturn, according to a new study.
A report on the study, “How America Saves for College,” was released by Sallie Mae and Gallup to coincide with “529 College Savings Day,” which is Friday. The day promotes awareness of the tax-advantaged college-savings programs known as “529 plans,” after the section of the federal tax code dealing with them. Many states have created such plans. Sallie Mae, the nation’s largest provider of student loans, also administers more than $17-billion in 529 plans through its affiliates.
The new study found that nine in 10 parents with children under the age of 18 expect their children to pursue some higher education, and 62 percent of such families are saving for college. About half of families saving for college make regular contributions to some type of savings vehicle.
The most popular method of saving is through savings accounts, money-market accounts, or certificates of deposit, the study found. Stocks or bonds are in second place, followed by 529 plans. About 33 percent of families saving for college use 529 plans.
Of those families not using 529 plans, more than half said they were not familiar with them.
The study was based on telephone interviews of 1,203 families with children under the age of 18 and was conducted from March 20 to April 17. —Beckie Supiano