Few Families Benefit From 529 College-Savings Plans, Report Says

Less than 3 percent of American families saved money for college in a 529 plan or a Coverdell Education Savings Account in 2010, and those that did tended to be much wealthier than families without those accounts, according to a report released on Wednesday by the U.S. Government Accountability Office. The report draws on data from the 2010 Survey of Consumer Finances, the 2007-8 National Postsecondary Student Aid Study, and federal tax information from 2007 to 2010. The report estimates that the median financial assets of families with those plans are about 25 times as high as families without such plans. “Although 529 plans do help some families save for college, families with less income and who are uncertain about whether their children will attend college may have less incentive to invest resources in 529 plans than in other forms of savings,” the report concludes.