RICHMOND, Va., Nov 9, 2004 (BUSINESS WIRE) -- If teenagers expect
their parents to shoulder the entire financial burden for college
education, they may be in for a rude awakening. According to Bridging
the College Savings Gap, a new study commissioned by the Genworth
Center for Financial Learning, American parents are not confident of
their ability to pay for college. The study reveals a lack of
preparedness on the part of parents and a stunning lack of awareness
on the part of aspiring collegians.
Forty percent of parents surveyed said that they are "not
confident at all" that they had saved enough money to pay for their
child's education. Despite that finding, two thirds of high school
juniors and seniors are confident their parents had done so. An even
greater number of college-bound teens, four out of five, expect their
parents to finance their postsecondary education, while an even larger
majority, 89 percent, think that their parents' greatest financial
goals are paying for their children's education. By contrast, only one
in three parents feel the same way.
The release of the study coincides with the start of "$tart Out
$aving for College Week," a nationwide initiative of The Genworth
Center for Financial Learning (www.financiallearning.com) that starts
today and runs until Nov. 14.
"There is an assumption on the part of teenagers that mom and dad
are going to handle their college costs but, in many cases, parents
simply haven't made adequate provisions," said Raymond Loewe,
president of College Money and an advisor to the Genworth Center for
Financial Learning. "One of the things parents need to do is to start
saving early. Waiting to address this issue until a child is already
submitting college applications is simply too late and often can cost
parents their financial security later in life."
The college savings gap has potentially devastating consequences
on the retirement savings of many parents. Twenty two percent of
parents overall expect to tap their retirement accounts to pay for
college, a significant finding given that a recent Genworth Center for
Financial Learning survey discovered that most Americans are already
at risk of outliving their retirement savings. Perhaps even more
interesting, the 22% number almost doubles to 43 percent for those
earning $50,000 or more annually.
"Parents need to carefully balance how they will fund a child's
education with saving for their own retirement," continued Loewe.
"Remember, you can take out loans for college, but no one will loan
you money to fund your retirement."
Some of the survey's more ominous findings demonstrate wishful
thinking by unprepared parents. More than one quarter of those
surveyed have either not accumulated savings for their child's
education or do not know what they have done to amass enough tuition
money for junior. Almost half of the parents expect primary funding
for college to come in the form of scholarships and financial aid.
"$tart Out $aving for College Week" was conceived with these
families and situations in mind. The initiative encourages American
families to realize their college savings and retirement goals, and
provides families with the tools needed to get started.
The Genworth Center for Financial Learning empowers Americans
financially by providing them with objective information that helps
them to achieve their life goals. It does not sell financial products
of services from any company, nor does it promote or advise on
financial products or providers. A 13-person volunteer advisory board
upholds the high level of excellence for the Genworth Center for
Financial Learning by ensuring the objectivity of all information on
the site. Genworth Financial, the developer of the Genworth Center, is
committed to helping people create and preserve wealth, protect assets
and enhance their lifestyles.
About Genworth Financial
Genworth Financial (NYSE: GNW) is a leading insurance holding
company serving the lifestyle protection, retirement income,
investment and mortgage insurance needs of more than 15 million
customers in 20 countries, including the U.S., Canada, Australia, the
U.K. and more than a dozen other European countries. For more
information, visit www.genworth.com.
SOURCE: Genworth Financial
Peppercom Public Relations
Christine Milligan, 212/931-6161
Meggan Lennon, 212/931-6136