ROCHESTER, N.Y., April 4 /PRNewswire/ -- The cost of a higher education is daunting for a lot of parents, and they may have good reason to worry. A new Wall Street Journal Online/Harris Interactive Personal Finance Poll reveals most (97%) U.S. adults who are the parent or legal guardian of a child 18 years of age or younger expect their oldest child in this age range to attend college, and nearly eight in 10 (79%) of these parents expect to pay for some or all of their child's college education. While parents overall appear to have a reasonable expectation of how much they will probably need to pay, the poll finds that a majority has saved little or nothing for this anticipated expense.
These are some of the results of an online survey of 2,239 U.S. adults conducted by Harris Interactive(R) between March 8 and 10, 2006 for The Wall Street Journal Online's Personal Journal Edition.
Type of school
Among those who are a parent or legal guardian of children age 18 or younger, when considering their oldest child in this age range, more than one-third (37%) says they think the child will attend an in-state public college, and equal numbers think they will attend a community college (11%) or an in-state private college (11%)(1). Interestingly, those in the South (52%) are more likely than those in the Northeast (24%), Midwest (27%) or West (43%) to think their child will attend an in-state public college. Income does not appear to be an indicator as to whether a parent thinks their child will attend college, however, those with an income of $75K or more (14%) are substantially less likely than those with an income of $35K or less (43%) to be unsure of the type of college their child will attend.
Whose pocket do the funds come out of?
Among those parents who think their child will attend college or those who are not sure, eight in 10 (79%) expect to pay for some or all of their child's college education. Predictably, those with incomes of $75K or more (90%) are more likely than those with lesser incomes (73%) to say they expect to pay for some or all of their child's college education.
While many parents are expecting to pay some portion of their child's college expenses, many are also relying on financial aid and/or scholarships to pick up some of the expenses, which may not be a wise assumption to make. Approximately seven in 10 (69%) parents who think their child will attend college or are not sure expect their child to receive scholarships and/or financial aid to help defray some or all of the costs. Those with incomes under $50,000 (17%) are more likely than those with incomes of $50,000 or more (3%) to expect scholarships and/or financial aid to foot the whole bill.
Dana Markow, Ph.D., Vice President of Youth and Education Research at Harris Interactive, comments: "Previous youth research(2) tells us that concerns about affording college are among the top teen worries. Almost half of those 13 to 21 years of age are worried that college will be too expensive for them to afford -- and that is about as many who worry about their weight or their looks, and more than who worry about having problems with drugs or alcohol."
Cost estimate and savings
This new survey suggests that parents who expect to pay for some or all of their child's college education appear to have reasonable expectations of the amount they will need to pay, with 11 percent expecting to pay less than $5,000, and 17 percent expecting to pay $5,000 to $9,999. Two in five (39%) are expecting a bill of $10,000 to $29,999, while another 16 percent expect to pay $30,000 or more. However, when it comes to saving money for this anticipated expense, a majority of parents don't appear to be putting their money where their mouth is. In fact, a quarter (26%) of parents who say they expect to pay for some or all of their child's college education say they have saved less than $5,000 and a third (32%) haven't saved anything specifically for that purpose.
The age of one's child/children has an impact on how much money a parent has saved. Among those who expect to pay for some or all of their child's education, large majorities of parents with children aged two to 13 (74%) and parents with children aged 14 to 18 (67%) have saved money specifically for their child's education, while less than half (46%) of parents with children under the age of two can say the same. Also, as expected, those with incomes of $75,000 or more were much more likely to say they have saved money for their child's college education (76%) than those with an income of $35,000 or less (42%).
Ways to save
There are a variety of accounts that can be used to save for a college education. According to the survey, the most common types of accounts parents who expect to pay some or all of their child's college education are using or plan to use include:
* Savings (32%)
* "529" college savings plan (28%)
* Mutual funds (18%)
* Stocks (17%)
* Bonds (15%)
* CDs (13%)
One-quarter (24%) of parents who expect to pay some or all college education costs say they are not sure what they are using or what they plan to use to save for this expense and approximately one in 10 (9%) say they do not plan to save money for this.
Again, income plays a role in the types of accounts parents are using or plan to use to save for their child's college education.
* Those with incomes of $35,000 to under $50,000 are more likely than
those in other income brackets to say they use or plan to use a savings
account (49% vs. 31%) or bonds (28% vs. 14%).
* Those with incomes of $75,000 or more are more likely than those with
lesser incomes to say they are using or plan to use a "529" college
savings plan (40% vs. 18%), mutual funds (27% vs. 9%) and stocks (29%
vs. 9%).
* Those with incomes less than $35,000 are much more likely than those
with higher incomes to say they are not sure what types of accounts they
are using or what they plan to use (50% vs. 16%).
(1) If respondents oldest child aged 18 or under was already attending or
had already attended college, respondents were asked to indicate what
type of college their child was attending or had attended.
(2) Harris Interactive 2005 Youth Pulse(SM)
TABLE 1
PARENT/LEGAL GUARDIAN
"For which of the following are you the parent or legal guardian?"
Base: All adults
Total
%
Parent/Legal Guardian of Any Child Age 18 or Younger (Net) 27
Child/children under the age of 2 5
Child/children between the ages of 2-6 years old 11
Child/children between the ages of 7-13 years old 13
Child/children between the ages of 14-18 years old 9
Child/children aged 19 years or older 24
I am not the parent or legal guardian of any children 53
Note: Percentages may not add up to 100% due to rounding.
TABLE 2A
COLLEGE ATTENDANCE -- BY REGION
"Now, if you have more than one child aged 18 or younger please think only
about your oldest child within this age range. Which of the following types
of colleges, if any, do you think your oldest child aged 18 or younger will
attend? If your oldest child aged 18 or younger is already attending or has
already attended college, please indicate what type of college they are
attending/attended."
Base: Parent/Legal guardian of any child age 18 or younger
Total Northeast Midwest South West*
% % % % %
Thinks Child Will Attend
College (Net) 97 97 95 98 98
A community college 11 9 9 15 11
An in-state public
college 37 24 27 52 43
An in-state private
college 11 19 9 9 4
An out-of-state private
college 6 12 4 3 4
An out-of-state public
college 4 2 3 3 10
Not sure 28 32 43 17 26
I do not expect my child/
children to attend college 3 3 5 2 2
Note: Percentages may not add up to 100% due to rounding.
*Small base (n<100). Data should be used directionally.
TABLE 2B
COLLEGE ATTENDANCE -- BY INCOME
"Now, if you have more than one child aged 18 or younger please think only about your oldest child within this age range. Which of the following types of
colleges, if any, do you think your oldest child aged 18 or younger will
attend? If your oldest child aged 18 or younger is already attending or has
already attended college, please indicate what type of college they are
attending/attended."
Base: Parent/Legal guardian of any child age 18 or younger
Income
Total Less than $35K- $50K- $75K+
$35K $49.9K* $74.9K
% % % % %
Thinks Child Will Attend
College (Net) 97 96 99 97 99
A community college 11 14 14 14 6
An in-state public
college 37 32 29 36 46
An in-state private
college 11 2 7 11 19
An out-of-state private
college 6 2 5 6 9
An out-of-state public
college 4 3 2 5 5
Not Sure 28 43 43 26 14
I do not expect my child/
children to attend college 3 4 1 3 1
Note: Percentages may not add up to 100% due to rounding.
* Small base (n<100). Data should be used directionally.
TABLE 3A
FUNDING OF COLLEGE EDUCATION -- BY INCOME
"How do you expect this child's college education to be funded?"
Base: Those who think their child will attend college and those who are
not sure
Income
Total Less than $35K- $50K- $75K+
$35K $49.9K** $74.9K
% % % % %
Expect to Pay Some or All
of Child's College
Education (Net) 79 68 79 75 90
I expect my child to
receive scholarships
and/or financial aid
and my child and I will
each pay some of the
remaining costs. 34 27 37 39 34
I expect my child to
receive scholarships
and/or financial aid
and I will pay the
remaining costs. 22 15 27 18 27
I will pay for all of
my child's college
education. 12 13 12 10 14
I will pay some of my
child's college
education, and they
will pay some of it
(with no scholarships
and/or financial aid
included). 11 14 3 8 15
I expect scholarships
and/or financial aid to
pay for all of my child's
college education. 9 16 19 2 3
I expect my child to
receive scholarships
and/or financial aid and
he/she will pay the
remaining costs. 4 4 1 11 2
I expect my child to pay
for all of their college
education. 3 4 * * 4
Other 5 9 1 11 *
Note: Percentages may not add up to 100% due to rounding.
* Less than 0.5%.
** Small base (n<100). Data should be used directionally.
TABLE 3B
FUNDING OF COLLEGE EDUCATION -- BY AGE OF CHILD/CHILDREN
"How do you expect this child's college education to be funded?"
Base: Those who think their child will attend college and those who are
not sure
Parent/Legal Guardian of
Child/ Child/ Child/ Child/
Children Children Children Children
Under Ages Ages Ages
Total Age 2 2-6 7-13 14-18
% % % % %
Expect to Pay Some or
All of Child's College
Education (Net) 79 79 77 78 79
I expect my child
to receive
scholarships and/or
financial aid and
my child and I will
each pay some of
the remaining costs. 34 32 33 38 30
I expect my child to
receive scholarships
and/or financial aid
and I will pay the
remaining costs. 22 15 20 25 25
I will pay for all
of my child's
college education. 12 17 10 9 10
I will pay some of
my child's college
education, and they
will pay some of it
(with no scholarships
and/or financial aid
included). 11 15 13 7 14
I expect scholarships
and/or financial aid to
pay for all of my
child's college
education. 9 12 13 11 10
I expect my child to
receive scholarships
and/or financial aid
and he/she will pay
the remaining costs. 4 2 3 5 4
I expect my child to
pay for all of their
college education. 3 1 3 2 5
Other 5 5 5 5 2
Note: Percentages may not add up to 100% due to rounding.
* Less than 0.5%.
TABLE 4
EXPECTED COST OF COLLEGE EDUCATION
"What do you expect to pay for your child's college education per year
(including room and board)?"
Base: Expect to pay some or all of child's college education
Total
%
Less than $5,000 11
$5,000-$9,999 17
$10,000-$19,999 23
$20,000-$29,999 16
$30,000-$39,999 6
$40,000-$49,999 4
$50,000-$59,999 2
$60,000 or more 4
Not sure 18
Note: Percentages may not add up to 100% due to rounding.
TABLE 5A
AMOUNT SAVED SPECIFICALLY FOR CHILD'S COLLEGE EDUCATION -- BY INCOME
"Approximately how much have you saved specifically for your child's
college education?"
Base: Expect to pay some or all of child's college education
Income
Total Less than $35K- $50K- $75K+
$35K** $49.9K** $74.9K
% % % % %
Saved Money Specifically for
Child's College
Education (Net) 68 42 73 64 76
Less than $5,000 26 21 33 29 26
$5,000-$9,999 10 11 16 5 12
$10,000-$19,999 8 2 7 5 13
$20,000-$39,999 4 * 5 8 4
$40,000-$59,999 3 1 -- 4 6
$60,000-$79,999 3 1 9 2 4
$80,000-$99,999 1 -- -- -- 3
$100,000-$199,999 * -- -- -- *
$200,000 or more 1 -- -- -- 2
Not Sure 11 7 2 11 7
I have not saved money
specifically for my
child's college education 32 58 27 36 24
Note: Percentages may not add up to 100% due to rounding.
* Less than 0.5%.
** Small base (n<100). Data should be used directionally.
TABLE 5B
AMOUNT SAVED SPECIFICALLY FOR CHILD'S COLLEGE EDUCATION -- BY AGE OF
CHILD/CHILDREN
"Approximately how much have you saved specifically for your child's
college education?"
Base: Expect to pay some or all of child's college education
Parent/Legal Guardian of
Child/ Child/ Child/ Child/
Children Children Children Children
Under Ages Ages Ages
Total Age 2** 2-6 7-13 14-18
% % % % %
Saved Money Specifically
for Child's College
Education (Net) 68 46 74 74 67
Less than $5,000 26 23 34 23 22
$5,000-$9,999 10 9 17 12 4
$10,000-$19,999 8 5 6 8 13
$20,000-$39,999 4 1 4 3 5
$40,000-$59,999 3 -- 2 6 3
$60,000-$79,999 3 2 4 5 2
$80,000-$99,999 1 2 -- 1 4
$100,000-$199,999 * -- -- -- *
$200,000 or more 1 * * 1 1
Not Sure 11 2 7 15 13
I have not saved money
specifically for my
child's college
education 32 54 26 26 33
Note: Percentages may not add up to 100% due to rounding.
* Less than 0.5%.
** Small base (n<100). Data should be used directionally.
TABLE 6A
TYPES OF ACCOUNTS USED/PLAN TO USE TO SAVE FOR CHILD'S COLLEGE
EDUCATION -- BY INCOME
"What types of account(s) do you use or plan to use to save for your child's
college education?"
Base: Expect to pay some or all of child's college education
Income
Total Less than $35K- $50K- $75K+
$35K* $49.9K* $74.9K
% % % % %
Plan to Save Money for
Child's College
Education (Net) 91 91 97 86 93
Savings 32 21 49 30 36
"529" college savings
plan 28 13 12 27 40
Mutual funds 18 4 13 14 27
Stocks 17 2 19 9 29
Bonds 15 11 28 9 16
CDs 13 18 15 7 12
Education IRA 9 4 9 5 13
Money market account 8 3 6 4 14
Roth IRA/Coverdell 7 3 12 3 10
UTMA, Uniform Transfer
to Minors Account 3 1 -- 2 5
UGMA, Uniform Gift to
Minors Account 3 1 2 1 6
Other 10 3 6 9 13
Not sure 24 50 18 19 14
I do not plan to save
money for my child's
college education 9 9 3 14 7
Note: Percentages may not add up to 100% due to rounding.
* Small base (n<100). Data should be used directionally.
TABLE 6B TYPES OF ACCOUNTS USED/PLAN TO USE TO SAVE FOR CHILD'S COLLEGE EDUCATION -- BY
AGE OF CHILD/CHILDREN
"What types of account(s) do you use or plan to use to save for your child's
college education?"
Base: Expect to pay some or all of child's college education
Parent/Legal Guardian of
Child/ Child/ Child/ Child/
Children Children Children Children
Under Ages Ages Ages
Total Age 2 2-6 7-13 14-18
% % % % %
Plan to Save Money for
Child's College
Education (Net) 91 96 96 89 86
Savings 32 24 42 37 26
"529" college
savings plan 28 48 36 28 14
Mutual funds 18 26 18 21 18
Stocks 17 20 18 19 20
Bonds 15 13 19 16 15
CDs 13 15 13 12 16
Education IRA 9 14 12 11 5
Money market account 8 8 7 10 9
Roth IRA/Coverdell 7 9 11 10 3
UTMA, Uniform
Transfer to Minors
Account 3 2 5 6 2
UGMA, Uniform Gift
to Minors Account 3 3 5 4 3
Other 10 3 10 12 13
Not sure 24 27 21 21 26
I do not plan to save
money for my child's
college education 9 4 4 11 14
Downloadable PDFs of The Wall Street Journal Online/Harris Interactive
Personal Finance Polls are posted at
http://www.harrisinteractive.com/news/newsletters_wsjfinance.asp.
Methodology
Harris Interactive(R) conducted this online survey within the United States between March 8 and 10, 2006 among a nationwide cross section of 2,239 adults aged 18 and over, of whom 579 are the parent/legal guardian of any child aged 18 or younger. Figures for age, gender, race/ethnicity, education, income and region were weighted where necessary to align with population proportions. Propensity score weighting was also used to adjust for respondents' propensity to be online.
In theory, with probability samples of this size, one can say with 95 percent certainty that the overall results have a sampling error of plus or minus 3 percentage points of what they would be if the entire U.S. adult population had been polled with complete accuracy. Sampling error for the various sub-sample results is higher and varies. Unfortunately, there are several other possible sources of error in polls or surveys that are probably more serious than theoretical calculations of sampling error. This includes refusals to be interviewed (nonresponse), question wording and question order, and weighting. It is impossible to quantify the errors that may result from these factors. This online sample is not a probability sample.
These statements conform to the principles of disclosure of the National Council on Public Polls.
About the Survey
The Wall Street Journal Online/Harris Interactive Personal Finance Poll is an exclusive poll that is published in the Personal Journal Edition of The Wall Street Journal Online at http://www.wsj.com/personaljournal.
About The Wall Street Journal Online
The Wall Street Journal Online at WSJ.com, published by Dow Jones & Company (http://www.dowjones.com/), is the largest paid subscription news site on the Web. Launched in 1996, the Online Journal continues to attract quality subscribers that are at the top of their industries, with 768,000 subscribers world-wide as of Q4, 2005.
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