Although parents are worried about the rising cost of college, the recession isn’t stopping most of them from saving, according to a survey that is to be released Monday by OppenheimerFunds Inc.
Despite the economic crisis, just 26% of the 1,000 parents of pre-college-age children surveyed said that the anticipated high future cost of college had discouraged them from saving, according to the survey. What’s more, 60% of parents surveyed said they hadn’t put saving for college on hold, 60% said that they hadn’t reduced the amount that they were saving for college, and 92% said that they hadn’t withdrawn funds from a college savings plan.
Most parents’ savings plans, however, fall far short of the expenses that they are likely to face, the survey found.
Of those polled, for example, 77% with pre-college-age children said that they had saved less than $20,000 for college, 62% said that they had saved less than $10,000, and 43% said that they had saved less than $5,000. Twelve percent said that they had saved nothing at all.
And six in 10 parents said that they strongly believed that if tuition costs kept skyrocketing, college would be unaffordable for most families.
Two-thirds of parents who used financial advisers said that they wanted to discuss saving for college with them over the next year.
“It’s clear that many Americans consider their adviser to be a valued partner … and it’s a way for advisers to keep growing their own business as well,” said Donna Winn, president and chief executive of OFI Private Investments Inc., a subsidiary of New York-based OppenheimerFunds, which manages eight 529 college savings plans in four states.
Although 61% of parents said that they were at least somewhat familiar with Section 529 college savings plans, just 24% of parents said that they used a plan.
Mathew Greenwald & Associates Inc. of Washington conducted the telephone survey in February.
In an effort to promote awareness of college savings plans and provide information on strategies to save for college, OppenheimerFunds has launched an
educational website.
For a story on college savings initiatives, see the upcoming May 15 issue of InvestmentNews.
