College bound

Most parents are aware of Section 529 college savings plans and like them. So why do only about 21% actually use them? Blame the current economic environment, said Carey Foran Hoch, senior vice president and general manager of college savings for John Hancock Funds LLC, which recently polled 1,005 investors in its Investor Sentiment Survey. “The economy and market are having an impact on people's not investing as much as they should,” she said. Of parents not utilizing a 529 plan, around 37% use either a different type of investment account or a regular savings account to set aside money for school. And with skyrocketing college tuitions, they also anticipate getting help from extended family and friends, Ms. Hoch said. “We want to help make the 529 plan a multigenerational opportunity,” she said. “We recognize it takes a family to send kinds to college nowadays. It's a collective effort from parents, grandparents, aunts, uncles and kids, and advisers need to form relationships with all of them.” The Hancock survey found that 60% of those surveyed believe that 529 plans are one of the best ways to save for higher education, but 65% wind up instead digging into their checking or savings accounts to pay tuition bills.