When it comes to preparing for future college costs, teenagers are taking action, helping parents both research how to pay for school and contributing to the family’s college savings fund. This is according to Private College 529 Plan’s first annual Teen College Savings Barometer, a new study of 1,000 teenagers (13-17 years old) commissioned by Private College 529 Plan, a prepaid tuition plan sponsored by more than 270 private colleges and universities.
Almost eight in ten teenagers interviewed said they personally conducted research to learn about the best way to pay for their own college education. This compares to only 60% of teenagers interviewed who said they personally conducted research about purchasing their first car. The vast majority (93%) of teens interviewed indicated that college savings planning was very or somewhat important to them.
Two-thirds (67%) of teens interviewed said they were very or somewhat involved in their family’s college savings planning process for their personal education.
The groups most likely to say they were very or somewhat involved are:
- Girls (72% compared to only 63% of boys).
- 17 year olds (75% compared to only 65% of teens ages 13-16).
- Black teens (81% compared to only 64% of Hispanics and 63% of Whites).
Two-thirds (66%) of teens said their parents discussed their efforts to save for their college education with them.
Teens in the Northeast were most likely to say their parents discussed their efforts to save for college with them (73%). Those in the South (66%), West (65%), and Midwest (61%), trailed behind.
Over half (54%) indicated they have any participation in the financial contributions that are made towards their college education savings fund. Thirty-seven percent indicated they contribute money they earned themselves (breaking down as 15% who said they contribute on a regular basis, and 22% who contribute once in a while) and 17% indicated that they contribute monetary gifts they have received instead of spending the money elsewhere.
In comparison, 37% of teenagers interviewed said they have made a financial contribution toward the purchase and/or subsequent payments associated with their first car. 27% indicated they contribute money they earned themselves (breaking down as 13% who said they contribute on a regular basis and 14% who contribute once in a while) and 10% indicated that they contribute monetary gifts they have received instead of spending the money elsewhere.
Only 14% of respondents interviewed said they know what a 529 plan is.
Almost three-quarters (73%) of teens interviewed said they felt very or somewhat confident in their understanding of the best ways to save for their future college education costs.
Interestingly, the percentage of teens who are very confident in their understanding decreases as they get older: 36% of 13 year olds, 27% of 14 year olds, 23% of 15 year olds, and 19% of 16-17 year olds.
Teens gave their parents the highest ratings with regards to educating them about their future college education costs and the best ways to save for these costs in order to avoid student loan debt. Friends received the lowest score.
Three-fifths of teens interviewed (60%) said they expect to have to take out student loans to pay for any portion of their future college education costs.
Interestingly, those in the Northeast (68%) and Midwest (64%) were more likely to say they expect to take out student loans, compared to 56% of those living in the West and 55% of those living in the South.
The survey was conducted online among a sample of 1,000 teenagers 13-17 years of age living in the U.S., comprising 500 boys and 500 girls. It was administered from March 6-12, 2013, by ORC International.
By Ayo Mseka