T. Rowe Price: Parents are Less Stressed About College Costs and Getting Wiser About Covering Them
"This September we have a real reason to celebrate College Savings Month: More parents are doing the right thing to financially prepare for college costs," says Stuart Ritter, CFP®, a senior financial planner at T. Rowe Price. "A stronger aversion to student debt, increased usage of 529 college savings accounts, and a decrease in parents pulling money from college savings for other expenses are very positive developments. "It's hard to say whether the 2018 findings are an anomaly or whether this may represent a shift in parents' thinking about college costs. For years, we frequently saw a mentality among parents of 'the best school at any cost.' To help parents discuss money with their kids, the firm created MoneyConfidentKids.com, which provides free online games for kids; tips for parents that are focused on financial concepts such as goal setting, spending versus saving, inflation, asset allocation, and investment diversification; and classroom lessons for educators. Misconceptions about 529 accounts are still common: One-third of parents mistakenly believe that they will lose any money left in a 529 account if their child doesn't go to college or if there's money left over after they finish. While taxes may be assessed on any distributed earnings, you never forfeit the contributions made to a 529 account.