It's only few days away from May 29, when the nation recognizes 529 Day, and it turns out that most Americans don't even know what the numerically named college savings plan is.
According to new survey results, about 62% of the 1,006 people who were asked to identify what a Section 529 plan is either guessed wrong or just didn't know.
In contrast, the Edwards Jones-sponsored survey found that wealthier respondents are more likely to know about the tax-advantaged investment tool. In fact, 62% of those making more than $100,000 a year identified 529 plan as a college savings plan, compared with 57% of those making between $75,000 and $100,000.
Only about one in four of the respondents who make less than $35,000 a year correctly identfied what a 529 plan is.
About 10 million active 529 plans contain a total of about $144 billion in assets, according to Financial Research Corp. Section 529 plans, started in 1996 and named after the Internal Revenue Service code that established them, are set up by states and offer tax-free gains on earnings if used to pay for eligible college expenses. Many also offer residents state tax deductions on a certain amount of annual contributions.
The celebration of 529 Day is not something Congress has officially established, but the College Savings Plans Network formalized it a few years ago as a great opportunity to publicize the plans.
Many states are holding contests to award $529 or in some cases $1,000 contributions into the 529 accounts of the winners, some of which are randomly drawn. Other contests require an essay.
The direct-sold Virginia Education Savings Trust, for example, is giving away 10 $529 awards and is waiving the $25 application fee for new accounts through June 30.
(To see a more detailed list planned 529 giveaways, go to #529day on Twitter.)