Most parents and grandparents still dont know about 529 plans, according to a poll commissioned by AllianceBernstein Investment Research and Management. The Harris Interactive poll showed that 64% of parents and 65% of grandparents were completely unaware of this type of college savings plan.
However, once the benefits of 529s were explained to them, 68% of parents and 44% of grandparents said they were more inclined to use them to help save for college. Lack of familiarity was the No. 1 reason that respondents, 44% of those polled, were not using a 529 plan; lack of discretionary income came in at a distant second, with only 15% of responses. Only 10% said it was because they were already using another vehicle.
These results are surprising in the face of considerable attention to 529 plans in the media, said Richard A. Davies, EVP and head of marketing at AllianceBernstein. "From year to year, our surveys continue to reveal awareness of 529 college savings plans among American families is relatively flat, and it was particularly surprising this year given the fact that 529 plans have received more mainstream media coverage possibly than any other new consumer savings vehicle."