Seven out of 10 Americans still do not know what a 529 plan is, according to the annual 529 Plan Awareness Survey from financial services firm Edward Jones. In its sixth-year monitoring college savings awareness, the survey found that most Americans still could not correctly identify a 529 plan as an option for saving for college expenses among four potential options. Only 32 percent of respondents correctly identified the savings option this year, up four percent from 2016 (28 percent), revealing a slight increase in overall awareness during the past 12 months. These college savings plans were first offered in 1996.

"The cost of college is rising annually, and many Americans are trying to identify the best savings strategy to address their needs," said Kyle Andersen, a principal at Edward Jones responsible for advising clients on college savings strategies. "Most Americans are unaware of the wide array of strategies that exist to help them put their goals into action. We urge investors to be proactive and learn about the different investment and savings options available to ensure they properly align with their long-term financial goals."

Awareness varied by several factors, including household income, household size and age. Gen-Xers were significantly more likely to correctly identify 529 plans (47 percent) compared to their Millennial (30 percent) and Boomer (29 percent) counterparts. Similarly, respondents with children were far more likely to correctly identify 529 plans as a college savings plans than those without children (42 percent vs. 27 percent, respectively). Similar to previous years, the survey found that 529 plan awareness increased with household income.

College Savings Strategies
When asked to identify all the specific saving strategies employed to pay for the cost of higher education, Edward Jones found that almost half of Americans (43 percent) used, or plan to use, personal savings to pay for college. This was followed by scholarships (36 percent), federal or state financial aid (35 percent) and private student loans (23 percent), with 529 plans rounding out the list as the least-used strategy (14 percent).

The survey indicated that of all generations, Millennials are most open to using various saving strategies to pay for college. Respondents ages 18-34 showed a strong preference for using a personal savings account among other options as a part of their college savings strategy, with 61 percent indicating so. Millennials and Gen-Xers also are most likely to use, or indicate that they plan to use, scholarships (55 percent and 46 percent) and federal or state financial aid (59 and 38 percent) compared to their Boomer counterparts (20 percent and 18 percent, respectively).

"We're encouraged by the fact that younger respondents are leveraging a combination of investing and savings strategies to help pay for college," added Danae Domian, an Edward Jones principal responsible for college savings plans. "There are many variables that affect a college savings strategy, so it's important to stay well diversified and start planning immediately. Proper education can prevent individuals from solely relying on scholarships or financial aid, as these strategies can be unpredictable. Incorporating a 529 plan into an overall college savings strategy will help with long-term planning and allow for flexibility in both annual contributions and recipient eligibility based on individual lifestyle."