11th annual survey finds nearly half of Americans do not believe they are saving enough for education
ST. LOUIS, May 24, 2022 / PRNewswire / – Despite weathering a pandemic and rising inflation, a majority of Americans (55%) say the current socio-economic conditions in the country have not changed their opinions on the importance of saving for higher education. This is according to an annual 529 awareness survey conducted by financial services firm Edward Jones with Morning Consult, which in its 11th annual year saw a slight uptick from 2021’s survey when 51% of Americans demonstrated the same opinion.
While education savings remains a high priority for Americans, only two in five (40%) recognize a 529 plan as an education savings tool – 51% of respondents said they either didn’t know or could not answer the question. Furthermore, only 19% of adults were aware 529 plans fund more than just higher education.
“We’re excited to see that Americans’ steady focus on education savings has not waivered despite continued curveballs like inflation and rising costs,” he said. Steve Rueschhoff, principal, managed investments and insurance at Edward Jones. “That said, Americans are leaving money on the table by not leveraging critical savings strategies such as 529s. That’s why I recommend assessing your complete financial picture. That way, you can fully understand the benefits and flexibility that tools like 529 plans can provide to help fund certain qualified education expenses. “
Hikes in Education Expenses Have Americans Reconsidering Savings Strategies
Among those who are more or less likely to consider changing their future education plans, the cost of higher education (49%) was the primary factor, followed by inflation (37%) and COVID-19 (28%). According to the College Board, tuition for in-state students attending a four-year public college increased by 1.6% and for students attending a four-year private institution it increased by 2.1% during the 2021-2022 academic year. Among these increases, the top tool Americans are using as part of their education savings strategy is a personal savings account (35%), which saw a five-percentage point jump since 2020. 529 plans are only being used by 13% of Americans, an eight-percentage point drop since 2020.
Despite these strategies and tools, nearly half of Americans (45%) say they don’t feel like they’re saving enough to cover their future education expenses. Of these, 23% said working with a financial advisor to help guide their financial decisions would help ease their concerns about budgeting for college savings.
“Strengthening your overall financial resilience is a critical component to alleviating cost concerns around education expenses,” added Rueschhoff. “Leveraging the knowledge of a financial advisor can help you identify the different approaches for savings for education costs, as well as to understand the trade-offs this may have on your other financial goals.”
The Need to Find New Motivations to Save
Despite the national pause on all federal student loan payments over the last two years and the potential college debt forgiveness program, 59% of adults surveyed say these updates have had no impact on their savings patterns. In fact, as Americans think through financial decisions and savings goals over the next five years, only 11% say they will contribute more to higher education savings.
Edward Jones is working to raise awareness for 529 plans and education savings tools through its Financial Fitness program which motivates high school students, clients, and associates to build financial knowledge and confidence. Edward Jones branches across the country are recognizing May 29 as “Save for Education Day,” to aid in the firm’s goal to raise awareness for 529 plans and education savings. The firm-wide day is named for the popular savings tool, the 529 plan.
This survey was conducted by global data intelligence company Morning Consult among a national sample of 2,220 adults ages 18 to 65+.
About Edward Jones
Edward Jones, a Fortune 500 firm, provides financial services in the US and through its affiliates Canada. The firm’s nearly 19,000 financial advisors serve more than 8 million clients with a total of $ 1.7 trillion in client assets under care. Edward Jones’ purpose is to partner for positive impact to improve the lives of its clients and colleagues, and together, better our communities and society. Through the dedication of the firm’s 50,000 associates and our branch presence in 68 percent of US counties, the firm is committed to helping more people achieve financially what is most important to them. The Edward Jones website is at www.edwardjones.comand its recruiting website is www.careers.edwardjones.com. Member SIPC.
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SOURCE Edward Jones