Legg Mason Intergenerational Survey on College Finances shows 72% of parents believe children should pay a portion of their own college expenses
BALTIMORE, May 30, 2012 /PRNewswire/ -- Legg Mason, Inc. (NYSE:LM) released findings today from their 2012 Intergenerational Survey of College Finances highlighting that among mass affluent and affluent families, 72% believe that children should pay a portion of their college expenses. Over 1,000 parents with $250,000 or more in investable assets were surveyed to identify financial planning behaviors and expectations when it came to college funding. A majority thought their kids should contribute a small portion of the total, while close to one-third thought they should contribute up to half. Only 7% thought children should contribute most of it and 2% believed children should be responsible for the full amount.
Parents who thought their children should contribute something cited the need to make sure they took college education seriously and appreciated it (63%), as well as to teach them some responsibility (34%). The 28% of parents who thought their children should not pay for any of their college expenses listed several reasons including: education is a parent's responsibility (41%); to stay focused on their studies (33%); to keep them out of debt (21%); or so they can enjoy the college experience (5%).
Funding college expenses for one or more children can be such a material event that it impacts the entire family for many years. Whether parents save in advance of college with 529 plans, or make up the underfunded portion through the use of current income, drawing from savings accounts or loans, it seems that most are making their children aware of the family's sacrifices in order to appreciate the importance of getting the most out of college.
"Almost three-quarters of all surveyed parents have decided to use the college experience as an opportunity to teach their children not just about overall responsibility, but also about fiscal responsibility," said John Kenney, Head of Legg Mason's Global Asset Allocation (LMGAA) Group. "Many parents also used the time leading up to college as an opportunity to impress upon their children the impact college expenses can have on their life even beyond the college years."
Parents discussed financial topics such as:
- Budgeting: 85%
- How to invest: 53%
- Earning money: 94%
- How their college will be paid for: 87%
- Savings planning: 78%
They also discussed college funding topics such as:
- The need for children to contribute to expenses: 73%
- The types of schools they can afford: 67%
- Scholarship options: 82%
- The impact of carrying a student loan: 63%
- The expenses that come with college: 92%
"These numbers are encouraging as they indicate that parents are teaching their college-aged children to budget wisely and to understand the importance of proper saving and investment behavior, including the negative impact of excessive debt," noted Kenney. "As parents we all want a better life for our children, achieving that goal requires a commitment to a greater level of fiscal responsibility."
Methodology
The 2012 Intergenerational Survey of College Finances was conducted online by Mathew Greenwald & Associates and commissioned by Legg Mason from March 26 to 31, 2012. Over 1,000 respondents with over $250,000 in investable assets were equally split between men and women of whom 405 had children not yet in college, 248 have children in college and 358 had children who were out of college and under the age of 40. The study investigated the differences in planning and expectations among three groups of parents: those with children who have already graduated, those with children currently enrolled and those who are planning to send their children to college.
About Legg Mason
Legg Mason is a global asset management firm with $643 billion in assets under management as of March 31, 2012. Through its diversified group of independent investment affiliates, it provides specialized active asset management in major investment centers globally. Legg Mason is headquartered in Baltimore, Maryland, and its common stock is listed on the New York Stock Exchange (symbol: LM).
About Scholars Choice
The Scholars Choice College Savings Program is the advisor-sold College Savings Program for the State of Colorado and is also used by investors and financial advisors throughout the U.S. It is one of the largest advisor-sold 529 college savings plans, with assets of $2.8 billion as of March 31, 2012. Scholars Choice is managed by Legg Mason Global Asset Allocation, LLC and primarily distributed by Legg Mason Investors Services, LLC. It is one of the lowest-cost advisor-sold 529 college savings plans.
Scholars Choice offers seven Age-Based Portfolios, five Years-to-Enrollment portfolios, six Static Portfolios and three U.S. Treasury Zero-Coupon Bond Target Maturity Portfolios. Investment options encompass a wide range of carefully constructed portfolios consisting of funds managed by Legg Mason affiliates including Batterymarch Financial Management, Brandywine Global Investment Management, ClearBridge Advisors, Royce & Associates and Western Asset Management; and one unaffiliated fund managed by Thornburg Investment Management.
Past performance is no guarantee of future results.
An investor should consider the Program's investment objectives, risks, charges and expenses before investing. The program disclosure statement at scholars-choice.com, which contains more information, should be read carefully before investing. If an investor or an investor's beneficiary is not a Colorado taxpayer, they should consider before investing whether their home states offer 529 Plans that provide state tax and other benefits only available to state taxpayers investing in such plans.
Investments in the Scholars Choice College Savings Program are not insured by the FDIC or any other government agency and are not deposits or other obligations of any depository institution. Investments are not guaranteed by the State of Colorado; CollegeInvest, Legg Mason Global Asset Allocation, LLC; Legg Mason Investor Services, LLC; or Legg Mason, Inc. or its affiliates, and are subject to investment risks.
Legg Mason, Inc., its affiliates, and its employees are not in the business of providing tax or legal advice to taxpayers. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any such taxpayer for the purpose of avoiding tax penalties. Tax-related statements, if any, may have been written in connection with the "promotion or marketing" of the transaction(s) or matter(s) addressed by these materials, to the extent allowed by applicable law. Any such taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor.
Scholars Choice is a registered service mark of CollegeInvest. CollegeInvest and the CollegeInvest logo are registered trademarks. Administered and issued by CollegeInvest, State of Colorado. Legg Mason Global Asset Allocation, LLC, Investment Manager. Legg Mason Investor Services, LLC is the primary distributor of interest in the Program; together, they serve as Manager of the Program. Legg Mason Global Asset Allocation, LLC; ClearBridge Advisors, LLC; Batterymarch Financial Management, Inc.; Brandywine Global Investment Management, LLC; Royce & Associates, LLC; Western Asset Management Company and Western Asset Management Company Limited; and Legg Mason Investor Services, LLC are Legg Mason, Inc. affiliates. Thornburg Investment Management, Inc. is not affiliated with Legg Mason Inc. and its affiliates.
SOURCE Legg Mason, Inc.
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