Table of Contents
Introduction and Abbreviations
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- Introduction
- Other relevant reports
- Scope of the report
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- Ever-changing legislative climate
- Student enrollment in colleges and universities
- Tuition and fees on the rise
- College graduation in more than four years
- Raising the profile of 529 Plans
Market Drivers
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- Legislative action
- Potential overhaul of the federal loan guarantee program
- Lack of student awareness of potential changes
- State budgets
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- Figure 1: Undergraduate grant aid in constant dollars, 1999/2000-2003/04
- Figure 2: Undergraduate grant aid in constant dollars, indexed growth and share of total by need-based and non-need-based, 1999/2000-2003/04
- Residency benefits stimulate greater in-state participation
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- Figure 3: States offering tax deductions or credits to in-state investors, 2005
- Awareness levels remain low on 529s…
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- Figure 4: Awareness of 529 Plans, by type of plan, 2003
- …particularly among lower-income households
- 529 plan managers face challenges
- Student loan interest rates
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- Figure 5: Student loan rates, 2004/05 and 2005/06
- Lender subsidies may be cut
- Competition between education savings dollars and retirement dollars
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- Figure 6: Primary financial goal among households with children under 18, 2003
- Student enrollment
- Numbers of older students should increase
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- Figure 7: Actual enrollment and middle alternative post-secondary enrollment projections, by gender, and working status, 2002-14
- Value of student aid growing faster than student numbers
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- Figure 8: Total aid, per FTE in constant dollars, by program, 1999/2000-2004/05
- Tuition costs
- Public four-year college fees see the greatest increases
- Fee increases outstrip inflation, but net tuition costs may be lower than expected
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- Figure 9: Average published charges for undergraduates, 2004/05 and 2005/06
- Number of years spent in college is on the rise
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- Figure 10: Persistence rates among college students, by institution type, 1989/90 and 1995/96
Market Size and Trends
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- 529 Plans
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- Figure 11: Growth in total assets of 529 Plans, 1998-Q1 2005
- Figure 12: Graph: Total assets in 529 Plans and % change, 1998-Q1 2005
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- Figure 13: Graph: Number of 529 Plans 2000- Q1:2005
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- Figure 14: Total 529 Plan assets, by state, March 2005
- Educational Loans
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- Figure 15: Growth in total assets of education (federal and non-federal) loans, 1995/96-2004/05
- Figure 16: Graph: Total educational loans (federal and non-federal) in current dollars, 1995/96 to 2004/05*
Market Segmentation
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- Federal, state and institutional aid
- Private Loans
- Educational savings plans
- Federal, state and institutional aid
- Overview
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- Figure 17: Federal, state and institutional aid for post-secondary education in constant dollars, 2003/04 and 2004/05
- Pell Grants key for low-income students…
- …while FSEOG awards also target low-income undergraduates
- Federal Loans
- $63 billion of federal loans awarded in 2004/05 academic year
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- Figure 18: Federal loans for post-secondary education in constant dollars, 2003/04-2004/05
- Perkins Loan appropriations have dropped
- Average value of Stafford subsidized loans falling slightly
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- Figure 19: Stafford subsidized loans for post-secondary education, 2003/04-2004/05
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- Figure 20: Stafford unsubsidized loans for post-secondary education, 2003/04-2004/05
- Value of PLUS loans triples since 1995/96
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- Figure 21: Plus loans for post-secondary education, 2003/04-2004/05
- Private loans
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- Figure 22: Graph: Growth in private loans for post-secondary education, 1996/97-2004/05
- Flexibility a key benefit
- Federal Consolidation Loans
- Educational Savings Plans
- 529 Prepaid Tuition Plans
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- Figure 23: 529 prepaid tuition plan assets, at current and constant prices, 1999-2004
- Impact on financial aid eligibility must be considered
- 529 Savings Plans
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- Figure 24: 529 Savings Plan assets, at current and constant prices, 1999-2004
- Savings plans offer great investment choice
- Coverdell Education Savings Accounts
Competitive Landscape
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- 529 College Savings Plans
- American Funds
- Fidelity Investments
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- Figure 25: Fidelity College savings plans, 2005
- TIAA-CREF Tuition Financing Inc. (TFI)
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- Figure 26: TIAA-CREF TFI College savings plans, 2005
- The Vanguard Group
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- Figure 27: Vanguard College savings plans, 2005
- T. Rowe Price Associates
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- Figure 28: T. Rowe Price College savings plans, 2005
- Educational Lending
- SLM Corporation (Sallie Mae)
- Early success for Tuition Answer
- Building sales through partnerships
- Collegiate Funding Services (CFS)
- CFS diversifying its product offering
- The Student Loan Corporation
- Nelnet Inc.
- MRU Holdings Inc. (MyRichUncle)
Advertising and Promotion
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- Educational loans
- Overview
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- Figure 29: Top 15 direct mail companies for educational loans, January 2004-July 2005
- Collegiate Funding Services
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- Figure 30: Collegiate Funding Services Private Loan program, 2005
- Charter One Bank
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- Figure 31: Charter One student loan programs, 2005
- Sallie Mae Tuition AnswerSM Loan
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- Figure 32: Sallie Mae Tuition Answer Loan, 2005
- Sallie Mae PLUS Loan
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- Figure 33: Sallie Mae PLUS Loan, 2005
- Bank of America Stafford Loan
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- Figure 34: Bank of America Stafford Loan, 2005
- Educational Savings
- TIAA-CREF Independent 529 Plan
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- Figure 35: TIAA-CREF Independent 529 Plan, 2005
- Ohio CollegeAdvantage 529 Savings Plan
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- Figure 36: Ohio CollegeAdvantage 529 Savings Plan, 2005
- Fidelity Advisor 529 Plan
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- Figure 37: Fidelity Advisor 529 Plan, 2005
The Consumer
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- Introduction
- Future and/or current college-bound household residents
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- Figure 38: Future and/or current college-bound residents, by gender of the respondent, October 2005
- Planned methods for paying for college/university expenses
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- Figure 39: Planned methods for paying for college/university expenses, by gender, October 2005
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- Figure 40: Planned methods for paying for college/university expenses, by presence of children under age 18 in the household, October 2005
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- Figure 41: Planned methods for paying for college/university expenses, by marital status, October 2005
- Types of loans planned to pay for college/university expenses
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- Figure 42: Types of loans planned to pay for college/university expenses, by gender, October 2005
- Savings programs held to pay for college/university expenses
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- Figure 43: Ownership of products used for Higher Education expenses, by gender, October 2005
- Obtaining college savings program information
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- Figure 44: Source of information about college/university savings programs, by gender, October 2005
- Types of college savings plans owned
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- Figure 45: Ownership of college savings products, by age, spring 2005
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- Figure 46: Ownership of college savings products, by household income, spring 2005
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- Figure 47: Ownership of college savings products, by level of educational attainment, spring 2005
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- Figure 48: Ownership of college savings products, by total current assets in the account, spring 2005
- Summary
Future and Forecast
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- Educational Loans
- Educational Savings
- Market forecast
- Methodology
- Education Loans
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- Figure 49: Total assets of U.S. educational loans, academic years 2004/05 through 2008/09
- 529 plans
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- Figure 50: Forecast of total 529 plan assets, at current and constant prices, 2004-09
Appendix: Trade Associations
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