Student loans are becoming a burden to many American students, which is why some adults may be looking for ways to save for their children's education. However, many people may not be aware of all the options.
Seven in 10 Americans explained that they were unaware of the 529 plan, and that they could use it to save for their children's college expenses, according to a report from Edward Jones. The 30 percent who said this was lower than in 2012, when 37 percent said the same.
Less than 18 percent of those who were at least 65 years of age knew about the plan, the report showed. Just 32 percent of those making between $50,000 and $75,000 had an idea of the plan, down 10 percentage points from the previous year's survey.
"Despite the fact that the average cost of an in-state public college totaled $22,828 in the 2013-2014 academic year, we have seen a downward trend in 529 plan awareness over the past three years," said Greg Dosmann, principal with Edward Jones. "It seems counterintuitive that the costs of higher education continue to rise while awareness for a vehicle than can make this cost more manageable continues to decline. We like to remind our clients that starting a 529 plan savings program as early as possible will help ease the burden as children near college age."
Student debt remains high for graduates
Having a savings plan may be a great way to cut down the debt that will have to be paid off later in life. According to a report from The Institute for College Access and Success, 71 percent of those students who graduated in 2012 had some level of student debt.
"Despite discouraging headlines, a college degree remains the best route to finding a job in this tight market," said Lauren Asher, president of TICAS. "But students and families need to know that debt levels can vary widely from college to college. If you need to borrow to get through school, federal student loans are the safest way to borrow. Whatever you earn, income-driven plans like Pay As You Earn can help keep federal loan payments manageable."
A total of 20 percent of the debt from these students were through private loans, the report added.