Despite rising college tuitions and ballooning student debt, only 36% of Americans can correctly identify a 529 plan as an education savings tool, according to a recent study conducted for Edward Jones — a one percentage point decline from 2012, when the firm did its first annual study of the plans.
The recent study also found that only 20% of parents report having saved or planning to save for their children's education using a 529 plan.
In lieu of saving for education with 529 plans, American parents have saved or are planning to save for education costs with a mix of personal savings strategies and financial aid options, with 40% utilizing a personal savings account, 23% relying on scholarships, and 22% employing federal or state financial aid in their education savings strategies, the company said in a release.
Barriers that respondents cited as keeping them from contributing to 529 plans included paying off their own student loans (15%), the fear of being penalized on unused funds if a child doesn’t go to college (14%), and the feeling that they don’t make enough money to open a 529 account (12%).
“With 67% of Americans admitting that they were not aware of the features and potential tax benefits of 529 plans and 65% unaware of their possible uses beyond higher education, there is an opportunity to fill the education gap with the help of a trusted financial adviser,” the firm said.
The financial advice industry has been facing inquiries into its cash sweep programs for years now.
Investor money allegedly went to strip clubs, exotic cars, and landscaping
Procyon adds $415 million in assets under management in New Jersey while Savant picks up a $213 million Southern California planning firm
With a growing number of real estate-rich Baby Boomers aging into retirement, some advisors may be failing to consider all the options available for those clients' assets.
Cornerstone Advisors study reveals compliance bottlenecks stall campaigns weeks after customer opportunities close.
As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
