Savingforcollege.com’s online surveys are not scientific, but are informative nonetheless. A perusal through our past surveys leads to some interesting findings:
- Two-thirds of families have not made any changes to their 529 plan contributions, despite the COVID-19 pandemic. 15% increased and 5% decreased their contributions, 13% have stopped making contributions and less than 1% have liquidated their 529 plans.
- Almost a quarter (23%) of parents send or plan on sending their children to private elementary and secondary schools, but only 18% plan on using a 529 plan to pay for it. Since 2018, 529 plans can be used to pay for up to $10,000 of private K-12 tuition per year.
- Most college savers want their investment to beat tuition inflation. Over 60% said they wanted to maximize their investment returns (with appropriate risk) and hoped to outpace college cost increases. Only 18% are looking to simply match college cost increases, and 16% indicate they do not wish to take on investment risk even if chances are they will not keep up with tuition inflation.
- Parents clearly desire sending their children to first-choice colleges. Most of you (82%) would put off your retirement for a couple of years if it meant your child attending the college of his or her choice without taking on more student debt. Only 9% of you would tell your child to find a less expensive school.
- Nearly three-quarters (74%) of respondents believe the government will be raising tax rates sooner or later. Tax-free 529 plans become even more attractive as tax rates go up.
- While a decent number of people with 529 accounts (34%) use the in-state 529 plan exclusively, an even greater number (48%) have decided to go out-of-state. Interestingly, 7% of respondents didn’t know if the 529 plan they were using was the home state plan or an out-of-state plan.
- Most parents feel their children should have a financial stake in their own education. A majority of respondents (58%) said their child should contribute to college costs even if they (the parents) had the resources to pay the entire cost.
- The use of 529 plans for adult education looks promising. Over half of you (52%) think it is “highly likely” you will go back to school (either on campus or online) at some point in your life.
- The states face a public relations challenge in their role as plan sponsors and administrators. Most respondents (76%) felt the states should not have the monopoly on offering 529 plans (and 43% said the states should be banned entirely). Only 16% were in support of the state monopoly.
Other organizations have also conducted college savings surveys.
- Sallie Mae conducts a survey entitled How America Saves for College every 1-2 years.
- The College Savings Foundation (CSF) conducts annual surveys of high school students and parents about planning and saving for college. One survey found that a third of high school students will change their college plans because of the pandemic. Another survey reported that three quarters of families who save for college started saving when the child was five years old or younger.
- An Edward Jones survey reports that only a third of Americans are familiar with 529 plans as a college savings tool.
- A survey from Discover Student Loans found that more than two-thirds of parents are somewhat or very worried about paying for college.
[Editor’s note: This article was originally published on August 26, 2007 and updated on October 23, 2020 by Mark Kantrowitz.]