529 News

Vanguard/Upromise study college savings habits

(January 5, 2006) - A July 2005 Internet survey of 1109 adults with children age 17 and under found that 37% of respondents considered saving for college to be their top financial priority, while 34% indicated that saving for retirement was their top priority. The survey was commissioned by The Vanguard Group and Upromise Investments Inc. and conducted by FRC Corporation.

Other key findings included the following:
-- Those with older children showed slightly more concern about paying for college than those with younger children.
-- 96% of parents expected their children to pursue some form of higher education. About one-third of parents expected to pay for all or most of their children's education, and respondents had saved approximately $4,700 per child on average.
-- Nearly four of ten parents who expected their children to attend college had at least some familiarity with 529 plans. Parents were the primary contrbutors, with about one-quarter of grandparents also contributing.
-- 87% of 529 investors cited tax-free withdrawals as the primary benefit of 529 plans, and most felt this tax advantage, scheduled to expire at the end of 2010, should be made permanent.

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