FRANKFORT, Ky., Dec. 11, 2013 /PRNewswire/ -- Kentucky parents value higher education for their children, according to a recent survey of Kentucky families about saving for college. The most popular vehicles used for college savings include a savings account and a 529 college saving plan. The majority of those personally responsible for saving for their child's education, however, find it difficult to save.
The Kentucky College Savings Report, administered by ORC International and sponsored by the Kentucky Education Savings Plan Trust (KESPT), indicates that 82 percent of parents surveyed have made saving for higher education a priority, with two-thirds believing that paying for college should be the responsibility of both the parents and the students. Kentucky parents are currently saving an average of $104 per month toward their child's college tuition.
Not all Kentucky parents are familiar with 529 college savings plans, with two-thirds of parents surveyed being familiar with them. Only 51 percent of parents who are familiar with 529 plans are also aware of the tax benefits.
Kentucky's official 529 college savings plan, the Kentucky Education Savings Plan Trust (KESPT), is designed to help families save for higher education expenses. Benefits include tax-free growth potential, flexibility as to where and how the funds can be used and a low minimum contribution of $25. "We are pleased to know that Kentuckians are committed to saving for their children's future," said David Lawhorn, KESPT program administrator. "But we definitely need to educate more Kentucky families about KESPT and the many advantages it offers. For example, the six investment options in the Plan are designed to accommodate a wide range of investment goals, including a Guaranteed Option for the most conservative investors."College remains a wise investment. According to the U.S. Census Bureau (Current Population Survey, 2011 Annual Social and Economic Supplement), a person with a bachelor's degree or higher can earn 79 percent more on average than someone with a high school diploma. Over a lifetime, the difference in earning potential can be more than $1 million. This is the first year that KESPT has sponsored a college savings survey to better understand Kentuckians' views. The survey was conducted among a sample of 501 Kentucky parents of children less than 18 years of age. One in five parents (21 percent) responded based on having a child who is four years of age or younger. One-quarter (24 percent) of respondents answered for a child aged five to nine, and another quarter (24 percent) answered for a child aged 10 to 13. Three in ten (31 percent) answered for a child 14 to 17 years of age. Respondents were at least 18 years old. About the Kentucky Education Savings Plan TrustKESPT is the Commonwealth's official 529 college savings plan, established by the Kentucky General Assembly in 1988. For more information about KESPT, its investment options and how to open an account, visit kysaves.com or call toll free (877) 598-7878. https://www.kysaves.com. Consider the investment objectives, risks, charges and expenses before investing in the Kentucky Education Savings Plan Trust. Please visit kysaves.com for a Plan Disclosure Booklet containing this and other information. Read it carefully. Account value in the investment options is not guaranteed and will fluctuate based upon a number of factors, including general market conditions. The contributions invested in the Guaranteed Investment Option are allocated to a Funding Agreement issued by TIAA-CREF Life to the Trust, which is the policyholder under the agreement. The Funding Agreement provides for a return of principal plus a guaranteed rate of interest and allows for the possibility that additional interest may be credited as declared periodically by TIAA-CREF Life. The interest rate guarantee is made only to the Trust. The tax information contained herein is not intended to be used, and cannot be used, by any taxpayer for the purpose of avoiding tax penalties. Taxpayers should seek advice from an independent tax advisor based on their own particular circumstances. Non-qualified withdrawals may be subject to federal and state taxes and the additional 10% federal tax. TIAA-CREF Tuition Financing, Inc., Plan Manager.