Polimeni, also the director of education savings programs at Bank of America Merrill Lynch, is glad half of the respondents are working with financial advisors. “If an advisor is going to take a holistic approach,” he says, “saving for college needs to be part of this.” Saving for college is only second to saving for retirement, he adds.
Interestingly, a greater percentage of younger parents are working with advisors for college financial planning—more than half of respondents in the 21-to-30 and 31-to-35 age groups, versus half in the 36-to-45 bracket. Further, 79 percent of all respondents (and 88 percent of those ages 21 to 30) say they’d work with an advisor if they knew it would help them save for college.
The majority of respondents working with an advisor (59 percent) say their advisor’s primary recommendation for saving for college is a 529 college savings plan. And 51 percent of the respondents are also aware they can invest in a 529 plan to fund their own educational expenses, such as graduate school.
Many parents indicate they’re considering strategies to cut college costs, such as having children start off at a community college (29 percent), live at home (22 percent) or attend a state school (15 percent). They’re thinking about vocational and career schools. And 71 percent expect their kids to contribute to college costs.
For the first time, the survey asked parents about the concept of free college. Even if free college were adopted across the U.S., 80 percent of respondents would still save for higher education. Notably, 60 percent are aware that many college expenses aren’t covered by the current proposals.
Parents are doing their homework.