While we're thinking about our families this holiday season, it appears that Americans have been slow to make use of on vehicle that can help provide for the next generation: the 529 plan. Even though college tuition costs have been spiraling ever higher, at an annual rate of 6 percent between 2005 and 2011, only 15 percent of American households with school-age children have invested in a 529 plan.
The people who are using these vehicles tend to be the affluent. According to a study conducted by the U.S. Government Accountability Office, families that do have 529 plans have assets that add up to 25 times the median for families without the college savings plans.
The average amount in a 529 plan is $16,000. That doesn't sound like much - for many schools, it's not even a year's tuition - but the total amount of money in these plans now is $167 billion, which is an all-time high.
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