Participation in section 529 college savings programs should increase, according to a survey conducted for American Century Investments by Elrick & Lavidge. Though currently about 6% of eligible parents take part in 529 programs, 39% of the 500 parents surveyed said they were likely to participate in a 529 plan in the future. That is up from 31% who said they would participate when the survey was done last year.
Awareness of 529 plans also grew. In this years survey, 37% of parents said they were aware of savings plans, up from 24% in 2000, the surveys first year. "With continued investor education, we believe that these numbers will continue to grow as parents come to understand the benefits of these programs," said Doug Lockwood, VP of shareholder education at American Century, in a statement.
Many parents who expect their children to go to college are already saving--nearly three out of four surveyed--but half of the parents have less than $10,000 put away. And it is common for parents to underestimate the costs of college. The average cost for four years at a public college is estimated to cost between $48,800 and $56,500 for state residents for current 18-year-olds and 15-year-olds respectively. Sixty percent of parents surveyed think one year of college will cost less than $15,000, and 38% think it will be less than $10,000.