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Press Releases
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Offers Parents Complimentary Guide: "Eight Myths of Education Funding"
New York, NY - March 1, 2001
While a majority of parents anticipate their children will attend college, many remain unaware of what they can do now to prepare for the cost of college. Many parents have not begun to save for their children's education, and a surprising number are relying on financial aid to take care of college costs. These findings were revealed in a college saver survey conducted earlier this year by Roper Starch and sponsored by Salomon Smith Barney.
Popular misconceptions about college funding can prove costly to parents and may unnecessarily limit the choice of colleges a child can attend. To bridge this knowledge gap about education funding, Salomon Smith Barney has produced a guidebook for parents entitled, "Eight Myths of Education Funding."
"Saving for a child's education is one of the most difficult financial hurdles that parents face. The survey results concerned us on a number of fronts. Many parents didn't have realistic expectations about managing college costs or were either unaware or misinformed about simple strategies they can implement now to save for later," said, Ellen Breslow, Managing Director, Individual Retirement Services at Salomon Smith Barney.
The guidebook illuminates some common misperceptions about saving for -- and paying for -- college expenses. Some of those "myths" include:
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Myth - The rate of increase for college costs is slowing - Reality: During the 2000-2001 school year, the rate of increase in college tuition and fees has outpaced the rate of inflation.
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Myth - Saving for college jeopardizes my child's chances for financial aid - Reality: Because current income is assessed at a higher rate than savings, it is your higher income -- not your savings -- that most impacts what the federal government and most colleges will expect you to contribute toward your child's education.
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Myth - State-sponsored "Section 529" College Savings Plans may only be used for in-state college tuition - Reality: The rules of state-sponsored programs changed dramatically in 1997 with the initiation of plans that allow for high contribution levels to an account that can be used to pay for college expenses at eligible institutions nationwide.
To receive a free copy of the guidebook, parents can call 1.800. EARNS.IT, ext. 2680, or call the Salomon Smith Barney office nearest you. To locate an office or get more information about investing, please use the Branch Locator on our site.
Methodology: The findings presented in this report are based on telephone interviews with a random cross-section of 294 American parents of children who are currently under 18 years of age and the parent believes that one or more will attend college when reaching the appropriate age. The findings in this report can be projected to this population within a margin of sampling error of plus or minus six percentage points. Subgroups will have a larger margin of sampling error. Responses were weighted by demographic factors including age, sex, race, and geographic region to ensure reliable and accurate representation of this population.
Salomon Smith Barney is a global, full-service investment banking and securities brokerage firm. The firm's 10,900 Financial Consultants located in approximately 460 offices across the United States, service over 6.2 million client accounts, representing over $816 billion in client assets. Salomon Smith Barney is a subsidiary of Citigroup.
Citigroup's Global Corporate and Investment Bank brings together Citibank, the world's most global corporate bank, and Salomon Smith Barney, a leading global investment bank and securities brokerage firm. Together they provide complete financial solutions to corporations, governments, institutions and individuals in 100 countries. Award-winning businesses include corporate and investment banking services, investment advice, financial planning and commercial insurance products. Salomon Smith Barney's top ranked equity research analysts track nearly all the S&P industry groups and hundreds of mid-and small-cap stocks globally.
Salomon Smith Barney is a subsidiary of Citigroup. Citigroup (NYSE: C), the preeminent global financial services company, provides some 120 million consumers, corporations, governments and institutions in more than 100 countries with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage and asset management. Other major brand names under Citigroup's trademark red umbrella are Citibank, CitiFinancial, Primerica, and Travelers. Additional information may be found at: www.citigroup.com.
SalomonSmithBarney is a service mark of Salomon Smith Barney Inc. Member SIPC.
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