529? What's that?
You're more likely to hear that sort of reaction if you mention the 20-year-old college savings plan than you were even a year ago—despite the surging problem of student loan debt.
That's according to a recent Edward Jones 529 Plan Awareness survey, which found that approximately 72 percent of Americans cannot identify a Section 529 savings plan as being for college savings. That's up from 66 percent a year ago—and despite the fact that such plans have been around since 1996.
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Millennials in particular are drowning in student loan debt, and one might think that their families would be looking for ways to ameliorate that situation. But apparently 529 plans are not among the strategies they're reviewing—at least not among lower-income families.
The survey found that plan awareness is higher among those who would be most likely to have the resources to fund them. About 46 percent of those with at least $100,000 or more know what a 529 plan is, compared with just 18 percent of those with less than $35,000.
Respondents with children were more likely to correctly identify 529 plans as a college savings plans compared those without children (32 percent vs. 26 percent). Understanding was also influenced by age, with GenXers, at 35 percent, being the most savvy on the subject and millennials the least, at just 24 percent.
The survey also found that a majority of Americans (88 percent) believe a college degree is important for future employment, with almost half (49 percent) of Americans agreeing that you cannot get a job without a college degree. Boomers were most likely to voice their belief about the value of a degree, at 53 percent, with millennials, again, trailing at just 43 percent.
As worries over student loan debt increase, along with those loan balances, more companies are looking at 529 plans as possible additions to benefits packages.
The idea is popular with employees; asked how likely they would be to participate in such a benefit, the great majority (86 percent) of respondents said yes. In fact, nearly all (93 percent) respondents with children ages 13–17 indicated that they would likely participate if such a benefit was offered by their employer.
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