A press briefing was held by AllianceBernstein L.P., New York, a unit of Allianz S.E. (AZ), Munich in order to bring up the important topic of “recent grads with heavy education debt” according to National Underwriter. AllianceBernstein condicted a study that in part revealed that “because of the loan burden, 42% of the survey participants said they live from paycheck to paycheck, 32% said they have had to move back with parents and 44% said they have delayed buying a home.”
One of the reasons for holding the press briefing was to push more financial advisors to try and get clients to save for college expenses. One of the proposed saving vehicles was the 529 College Savings plan. However, some attendees at the briefing said many advisors aren’t looking to sell 529 plans because “advisors too often are focused on selling other products that are more profitable or easier to understand.”
The bottom line is that if an advisor wants to truly do the right thing for their clients they will talk with them about saving for college. Starting parents to save even $50 to $100 a month when their child or children are very young will pay off 15 or so years down the line.
The question is which product should be used? The 529 plan is only for college expenses. The money inside a 529 plan must be used for college related expenses but it can also be passed along to another family member if the intended recipient of the money chooses not to attend college. However, the money in the 529 plan is counted against possibly receiving financial aid. The more money in the plan the less financial aid a student can qualify for.
