Study: 529 plans make up small percentage of overall college savings

By Gary Linnell

ProWEB Wire (Industry News)


The college savings market is expected to more than double during the next five years, but Section 529 plans account for a fairly minor portion, according to a recent study by Financial Research Corp.

The study found that by 2014, assets considered as college savings should reach $937 billion, only 25 percent, or $247 billion of which will come from 529 plans. Presently, 529 plans make up around 24 percent of the $487 billion market.

According to Bridget Bearden, author of the study, "When comparing the size of the college savings market relative to the moderate penetration of 529 plans, it is clear that this product has further opportunity for expansion. In order for program managers to capitalize on this opportunity, they must truly understand their target market, offer the right product features, and distribute their product effectively."

Finally, the FRS suggest that improvements that could improve 529 popularity include rewards programs, online capabilities, better fees and expenses, and better investment options.