Saving for College, But Not on Taxes

Much as they dislike paying taxes, Americans aren’t always attentive to (legal) methods of reducing what they owe. A survey conducted for Country Financial by Rasmussen Reports points to such neglect on the part of people who are saving (or ought to be saving) for their kids’ college educations.

Among adults “who expect to be responsible for paying for a child’s education,” just 24 percent of respondents reported using tax-advantaged accounts (529 plans, Coverdell Education Savings Accounts, etc.) to save for it. The figure falls short of a majority even in the $100,000-plus income bracket, though (at 43 percent) it’s considerably higher.

Naturally, many respondents see financial constraints on their children’s options. While 17 percent said their kids will be able to attend any college that will have them, 75 percent said costs will “limit their choices.” Despite their higher propensity (and ability) to salt away money for college, 66 percent of those in the $100,000-plus bracket said financial factors will limit their kids’ choices.

Though a majority of all respondents agreed that college remains a good investment, despite its rising cost, this opinion is less than universal. In a breakdown by income cohort, 66 percent of those in the under-$20,000 cohort said they think college is a good investment, as did 74 percent of those in the $20,000-39,999 bracket. The figure was 82 percent for the $40,000-59,999s, 84 percent for the $60,000-74,999s and $75,000-99,999s, and 86 percent for those in the $100,000-plus class.