The 529 industry, faced with the dismal fact that 56% of parents don’t know about these college savings plans, is debating whether to launch a national advertising campaign or to reach parents on a more individual basis through a grassroots marketing campaign, Investment News reports.
“We are well aware of the fact that awareness of 529 plans is not where we as an industry wish it to be,” said Jackie Williams, chairwoman of the state administration group College Savings Plan Network and executive director of the Ohio Tuition Trust Authority. The College Savings Plan Network is leaning in favor of a major national ad campaign and is currently looking to hire an agency and to partner with a company, not necessarily a financial services company, to help fund the effort.
Besides finding that 56% of parents in America don’t know what a 529 plan is, Upromise Investments learned through a survey that only 12% have opened a 529 plan, results that Upromise Vice President of Marketing Liz Robinson called “incredibly scary.”
But unlike the College Savings Plan Network, Robinson believes the way to raise awareness is through “peer-to-peer communication. We need to drive the message into the community and get into schools” and parent-teacher associations, she said.
Scott Gates, director of the 529 program in Kansas, concurred: “A 30-second TV or radio spot does not sell 529s. You have to get out and pound the pavement and talk to people about them.” In fact, Kansas promotes its 529 through personal meetings with financial advisers throughout the state. Iowa take a different, though still personal, approach, by promoting its 529 program at state and county fairs.
Assets in 529 plans are growing at a good clip, but they are still low, according to the College Savings Plan Network. In the third quarter they stood at $127 billion, 31% higher than the third quarter of 2006.