T. Rowe Price’s 2016 Parents, Kids & Money Survey

8TH ANNUAL PARENTS, KIDS & MONEY SURVEY—COLLEGE RELATED FINDINGST. Rowe PriceAugust 2016

Detailed Results

2

Contents

Saving for kids’

education

Existing Student Loan Debt..................................................................................3

Saving for College…………………………………………………………………….7

Debt Threshold.……………………………………………………………………....17

Attitudes & Perceptions About Saving for College………………………………..22

Kids’ Responses……………………………………………………………………...27

Respondent Profile…………………………………………………………………..32

Objective and Methodology ………………………………………………………...37

EXISTING STUDENT LOAN DEBT

4

16%

2%9%

12%

14%20%

23%

40%

48%

56%

0% 10% 20% 30% 40% 50% 60%

I don't have any debt

Other

Payday loan

Student loan (from kids' education)

Friend/relative debt

Student loan (from parents' education)

Medical debt

Car loan

Mortgage

Credit card debt

Types of Debt

T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents)

Q14. WHICH OF FOLLOWING TYPES OF DEBT DO YOU HAVE?(CHECK ALL THAT APPLY)

61% of parents have more than one type of debt, with a mean number of debt types at 2.25

28% of parents have either type of student loan debt (for parents’ or kids’ education), and 5% have student loan debt for both parents’ and kids’ education

Parents with student loan debt (from parents’ education) are significantly more likely to have credit card debt (67% vs. 54%) and payday loan debt (19% vs. 7%)

Parents with student loan debt (from kid’s education) are significantly more likely to have credit card debt (75% vs. 54%) and payday loan debt (38% vs. 5%)

Parents with student loan debt (from parents’ education) are significantly more likely to say they lose sleep worrying about college costs for their kids (49% vs. 40%)

5

27%

21%

29%

23%

0% 5% 10% 15% 20% 25% 30% 35% 40%

$30,000 or more

$15,000 to $29,999

$5,000 to $14,999

Less than $5,000

Amount of Debt—Student Loans (Parents)

T. Rowe Price 2016 Parents, Kids & Money Survey N=611 (Have Student Loans for Parents’ Education)

Q15. WHAT IS THE APPROXIMATE BALANCE (I.E., THE AMOUNT YOU STILL OWE) FOR YOUR STUDENT LOANS (FOR YOU OR SPOUSE’S EDUCATION)?

Mean: $27,078Median: $12,500

6

32%

22%

18%

27%

0% 5% 10% 15% 20% 25% 30% 35% 40%

$10,000 or more

$5,000 to $9,999

$1,000 to $4,999

Less than $1,000

Amount of Debt— Student Loans (Kids)

T. Rowe Price 2016 Parents, Kids & Money Survey N=134 (Have Student Loans for Kids’ Education)

Q15. WHAT IS THE APPROXIMATE BALANCE (I.E., THE AMOUNT YOU STILL OWE) FOR YOUR STUDENT LOANS (FOR YOUR KIDS)?

Mean: $10,768Median: $5,000

SAVING FOR COLLEGE

8

33%

67%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Saving for retirement

Saving for kids' college education

Family Saving Priority


Q16. WHICH OF THE FOLLOWING IS THE HIGHER PRIORITY FOR YOU AND YOUR FAMILY?

Gender Age

Men Women Millennial Gen X Boomer

Saving for kids’ college education 70% 63% 77% 65% 57%

Saving for retirement 30% 37% 23% 35% 43%

9

5%4%

1%

4%5%

2%3%

7%1%

12%1%

4%2%2%

11%1%

3%4%

28%

0% 5% 10% 15% 20% 25% 30%

Never181716151413121110

987654321

Age to Start—Saving for College


Q57. HOW OLD DO YOU THINK KIDS SHOULD BE WHEN YOU: START SAVING FOR THEIR COLLEGE EDUCATION?

Mean: 6.73Median: 55 or Younger: 47%10 or Younger: 68%Teenagers: 19%

10

17%

40%

51%

54%

58%

0% 10% 20% 30% 40% 50% 60% 70%

None of the above

Money saved for other goals

An emergency fund to cover unexpected expenses

Money saved for retirement

Money saved for kids’ college education

Savings Accounts


Q20. WHICH OF FOLLOWING DO YOU HAVE?(CHECK ALL THAT APPLY)

Total Types of Savings None: 17%One: 20%Two: 25%Three: 19%Four: 19%

Gender Age

Men Women Millennial Gen X Boomer

Money saved for kids’ college education 69% 48% 70% 56% 55%

11

2%

1%

5%

12%

55%

24%

0% 10% 20% 30% 40% 50% 60%

I don't contribute

Every other year

Annually

Quarterly

Monthly

Weekly

Frequency of Contributions—College

T. Rowe Price 2016 Parents, Kids & Money Survey N=633 (Have College Savings)

Q21. APPROXIMATELY HOW OFTEN DO YOU CONTRIBUTE TO YOUR KIDS’ COLLEGE EDUCATION SAVINGS?

12

College Savings Accounts


1%3%

9%

11%

12%13%

15%

20%21%

22%24%

37%43%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Not sureOther

Roth IRAAnnuity or other insurance product

Traditional IRAUGMA or UTMA account

Individual securities or brokerage account401(k) plan

Certificate of deposit (CD)Checking account

Savings bond529 account

Regular savings account

Q33. WHAT TYPES OF ACCOUNTS DO YOU USE FOR COLLEGE SAVINGS?(CHECK ALL THAT APPLY)

Total # of Accounts One: 50%Two: 20%Three: 11%Four +: 19%

Mean: 2.32

Of those parents who have college savings, 37% use a 529, while 27% use a retirement account (401(k) or IRA)

Millennials are less likely than Gen Xers or Baby Boomers to use a 529 account for college savings (22% vs. 42% vs. 42%)

13

College Savings Accounts for Each Kid

T. Rowe Price 2016 Parents, Kids & Money Survey N=477 (Have College Savings and More than One Kid)

31%

69%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Same account

Separate accounts

Q34. DO YOU HAVE SEPARATE COLLEGE SAVINGS ACCOUNTS FOR EACH OF YOUR KIDS OR DO YOU USE THE SAME ACCOUNT(S) FOR ALL YOUR KIDS?

14

Expectations About Paying for College

T. Rowe Price 2016 Parents, Kids & Money Survey N=1,047 (Expect Kid(s) to Go to College)

12%

23%

65%

0% 10% 20% 30% 40% 50% 60% 70%

I will be able to pay the entire cost of college

I will be able to pay most of the cost of college

I will be able to pay some of the cost of college

Q35. WHICH OF THE FOLLOWING BEST DESCRIBES HOW YOU FEEL ABOUT SAVING FOR YOUR KIDS’ COLLEGE EDUCATION?

15

Covering the Cost of College

T. Rowe Price 2016 Parents, Kids & Money Survey N=927 (Expect Kid(s) to Go to College and Will Not Be Able to Cover the Entire Cost)

5%3%

8%

11%12%12%

13%15%

16%26%26%

35%38%

51%

0% 10% 20% 30% 40% 50% 60%

I haven't thought about itOther

Sale of real estateTake money from retirement accounts

Home equity loan/second mortgageOther family members

PLUS loanPersonal loan or line of credit

Credit cardsStudent loan (parents to pay)

Through regular incomeStudent loan (kids to pay)

Kids will workGrants/scholarships

Q36. HOW DO YOU THINK YOU WILL COVER THE REMAINING COST FOR YOUR KIDS’ COLLEGE EDUCATION?(CHECK ALL THAT APPLY)

A total of 50% of parents are relying on student loans to cover college expenses

70% of those who plan to cover college costs using credit cards are already carrying a credit card balance month-to-month

21% of parents expect kids to work or take a loan, without bearing any of the remaining cost for college themselves

16

Using Money From College Savings Accounts


Q37. WHICH OF THE FOLLOWING THINGS HAVE YOU PAID FOR WITH MONEY TAKEN FROM YOUR KIDS’ COLLEGE SAVINGS IN THE PAST TWO YEARS? (CHECK ALL THAT APPLY)

8%8%

10%

10%10%

11%12%

12%12%12%12%

13%13%

18%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

Down payment on a homeTo cover expenses while unemployed

WeddingReplenish emergency fund

Car purchase or repairHoliday spending

Childcare/daycareDay-to-day expenses

Home repair/renovationHealth care costs

Pay off debtTo pay taxes

VacationKids' education

Have taken money from college savings

45%

55%Yes

No(N=282)

3% of parents who have taken money out of college savings, have only done so to pay for their kids’ education

Parents who have a 529 are significantly less likely to spend college savings on other things (38% vs. 49%)

DEBT THRESHOLD

18

Paying for College—Parent Debt Threshold


8%

11%

9%

13%

16%

17%

14%

11%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

More than $150,000

$100,000 to $150,000

$75,000 to $99,999

$50,000 to $74,999

$25,000 to $49,999

$10,000 to $24,999

Less than $10,000

None

Q38. HOW MUCH DEBT ARE YOU WILLING TO TAKE ON PERSONALLY TO PROVIDE YOUR KIDS WITH A COLLEGE EDUCATION?

Women are more likely than men to say never/less than $10,000 (21% vs. 7%), and less likely to say $50,000 to $99,999 (15% vs. 30%) and $100,000 or more (14% vs. 24%)

57% of parents are willing to take on $25,000 or more in debt to pay for the kids’ college education, with 19% willing to borrow $100,000 or more

19

Paying for College—Kid Debt Threshold


6%

8%

7%

11%

15%

19%

16%

17%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

More than $150,000

$100,000 to $150,000

$75,000 to $99,999

$50,000 to $74,999

$25,000 to $49,999

$10,000 to $24,999

Less than $10,000

None

Q39. HOW MUCH DEBT ARE YOU WILLING TO LET YOUR KIDS TAKE ON TO GET A COLLEGE EDUCATION?

Women are more likely than men to say never/less than $10,000 (42% vs. 24%), and less likely to say $50,000 to $99,999 (12% vs. 24%) and $100,000 or more (10% vs. 19%)

Nearly half (47%) of parents are willing to let their kids borrow $25,000 or more, with 14% willing to let their kids take on $100,000 or more in student loan debt

20

Debt Threshold by Current Student Loan Debt for Parents’ Education


18%

22%

33%

27%

24%

22%

35%

19%

0% 10% 20% 30% 40%

$100,000 or more

$50,000 to $99,999

$10,000 to $49,999

Less than $10,000

Yes No

Q39. HOW MUCH DEBT ARE YOU WILLING TO LET YOURKIDS TAKE ON TO GET A COLLEGE EDUCATION?

Q38. HOW MUCH DEBT ARE YOU WILLING TO TAKE ONTO PROVIDE YOUR KIDS WITH A COLLEGE EDUCATION?

13%

19%

33%

35%

22%

15%

36%

27%

0% 10% 20% 30% 40%

$100,000 or more

$50,000 to $99,999

$10,000 to $49,999

Less than $10,000

Have Parental Student Loans

= Statistically significant - .05 level

Parents who currently have student loan debt (for their education or their spouse’s) are willing to take on higher levels of debt to pay for their kids’ college education

21

Debt Threshold by Current Student Loan Debt for Kids’ Education


16%

20%

36%

28%

38%

37%

21%

4%

0% 10% 20% 30% 40%

$100,000 or more

$50,000 to $99,999

$10,000 to $49,999

Less than $10,000

Yes No

Q39. HOW MUCH DEBT ARE YOU WILLING TO LET YOURKIDS TAKE ON TO GET A COLLEGE EDUCATION?

Q38. HOW MUCH DEBT ARE YOU WILLING TO TAKE ONTO PROVIDE YOUR KIDS WITH A COLLEGE EDUCATION?

12%

16%

35%

37%

31%

37%

27%

6%

0% 10% 20% 30% 40%

$100,000 or more

$50,000 to $99,999

$10,000 to $49,999

Less than $10,000

Have Kid Student Loans

= Statistically significant - .05 level

Parents who currently have student loan debt (for their kids’ education) are willing to take on higher levels of debt to pay for their kids’ college education

ATTITUDES & PERCEPTIONS ABOUT SAVING FOR COLLEGE

23

Attitudes About College


35%

40%

42%

50%

63%

68%

69%

71%

76%

81%

0% 20% 40% 60% 80% 100%

College isn’t worth the expense

I don’t use a 529 for college savings because then I won’t be eligible for financial aid

I lose sleep worrying about college costs

If I pay for my kids’ college, I expect them to help me in retirement

I feel guilty that I won’t be able to pay more for their college

I’d be willing to get a second or part time job to pay for my kids’ college education

Because my kids will go to college before I retire, I feel like I should put moneytowards that first and save for retirement after

I would consider sending my kids to a less expensive college to avoid taking onstudent loans

I’d be willing to delay my retirement to pay for my kids’ college education

I think nearly all students graduate from college with student loans

Q41. HOW MUCH DO YOU AGREE OR DISAGREE WITH THE FOLLOWING STATEMENTS?(DISPLAYING PERCENT THAT AGREE)

42% of parents lose sleep worrying about college costs, which is up from 28% when the same question was asked in 2014

24

Perception of College Cost


26%

23%

23%

28%

0% 5% 10% 15% 20% 25% 30%

$100,000 or more

$60,000 to $99,999

$40,000 to $59,999

Less than $40,000

Q40. WHAT DO YOU THINK IS THE TOTAL COST FOR A FOUR-YEAR COLLEGE EDUCATION AT AN IN-STATE PUBLIC COLLEGE/UNIVERSITY?

While The College Board reports that the average cost of a four-year in-state college education is $80,000, only 35% of parents say $80,000 or more

25

Understanding of College Saving


21%

30%

38%

42%

45%

48%

53%

70%

0% 20% 40% 60% 80%

There are no penalties to withdraw money from a 529 college savings plan when it willnot be used for education

You cannot save for multiple children within the same 529 college savings plan

Stocks are generally less risky investments than bonds

I lose any money left in a 529 college savings plan if my child doesn’t go to college or if there’s money left over when they finish

A 50-year-old shouldn’t put any of their retirement money in stocks because stocks can lose money

Having an emergency fund to cover one or two months living expenses is sufficient

If I save 6% of my income towards retirement each year, I’ll have enough money to comfortably retire at age 65

What investments you choose (e.g., what stock, bond, or mutual fund) matters more thanhow much money you invest

Q62. PLEASE INDICATE WHETHER EACH OF THE FOLLOWING STATEMENTS IS TRUE OR FALSE

PERCENT OF PARENTS WHO INCORRECTLY BELIEVE:

26

Understanding of College Saving


43%

57%

0% 10% 20% 30% 40% 50% 60%

False

True

Q62. PLEASE INDICATE WHETHER EACH OF THE FOLLOWING STATEMENTS IS TRUE OR FALSE: CONTRIBUTING TO A 529 COLLEGE SAVINGS PLAN WILL DEFINITELY IMPACT YOUR ABILITY TO GET FINANCIAL AID FOR COLLEGE LATER

KIDS’ RESPONSES

28

24%

9%

67%

0% 10% 20% 30% 40% 50% 60% 70% 80%

I don't know

No

Yes

Knowledge of Parental College Savings


Q83. DO YOUR PARENTS SAVE MONEY SO YOU CAN GO TO COLLEGE?

Of the 67% of kids who think their parents are saving for college, 77% have parents who indicated they are saving, while 23% of kids have parents who indicated that they are not saving for college

29

11%

4%

85%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Not sure

No

Yes

Kids’ College Expectations


Q84. DO YOU THINK YOU WILL GO TO COLLEGE?

30

Kid Agree Statements


41%

43%

57%

62%

78%

0% 20% 40% 60% 80% 100%

I’ve lied to my parents about what I’ve spent money on

I sometimes feel ashamed that I have less than most of the other kids

I expect my parents to buy me what I want

I expect my parents to cover the cost for whatever college I want to go to

I would consider going to a less expensive college to avoid taking on student loans

Q89. HOW MUCH DO YOU AGREE OR DISAGREE WITH THE FOLLOWING STATEMENTS?(DISPLAYING PERCENT THAT AGREE)

61% of kids whose parents say they will not be able to cover the entire cost of college say that they expect their parents to cover the cost for whatever college they want to attend

31

Knowledge-Based Kids Questions


80%

85%

0% 20% 40% 60% 80% 100%

My parents should save for college in a savings account

It costs more to go to college than it does to buy a car

Q95. PLEASE INDICATE WHETHER EACH OF THE FOLLOWING STATEMENTS IS TRUE OR FALSE.(DISPLAYING PERCENT SAYING TRUE)

RESPONDENT PROFILE

33

49%51%

Respondent Profile

26%

25%

25%

24%

South

Northeast

West

Midwest

Q2. REGIONQ1. AGE Q3. GENDER

MenWomen

Q5. HHI

76%

11%

9%

4%

1%

Married

Separated/divorced

Single

Married (same sex)

Widow/Widower

Q4. MARITAL STATUS

29%

58%

13%

< 35

35–50

51 +

30%

38%

32%

< $50K

$50K–$99,999

$100K +

74%

16%

9%

5%

2%

White/Caucasian

Hispanic/Latino

Black/AfricanAmerican

Asian

Native American

Q6. RACE/ETHNICITY

T. Rowe Price 2016 Parents, Kids & Money SurveyN=1,086 (Parents: Total respondents)

34

Respondent Profile

Q7. EDUCATION LEVEL

64%

14%

9%

4%

4%

3%

2%

Employed full-time

Stay at home parent

Employed part-time

Self-employed

Unemployed

Retired

Student

Q8. EMPLOYMENT STATUS

2%

11%

21%

12%

33%

21%

< HS graduate

HS graduate

Some college

Assoc. degree

Bachelor's degree

Graduate degree

28%

42%

19%

11%

One

Two

Three

Four +

Q9. # KIDS IN HH

51%49%

Q11. KID GENDER

BoysGirls

Q12. KID AGE

10%

14%

16%

13%

14%

19%

14%

8

9

10

11

12

13

14

T. Rowe Price Parents, Kids & Money SurveyN=1,086 (Parents: Total respondents); N=1,086 (Kids: Total respondents)

80%

15%

5%

Biologicalonly

Non-biolgical

only

Mix

TYPE OF KIDS

35

Respondent Profile

25%

53%

17%

4%

1%

None

One

Two

Three

Four +

# BOYS IN HOUSEHOLD# KIDS IN HOUSEHOLD

KID GENDER MIX

28%

42%

19%

11%

One

Two

Three

Four +

21%

25%

54%

Girls only

Boys only

Boys and girls


# GIRLS IN HOUSEHOLD

22%

51%

21%

5%

2%

None

One

Two

Three

Four +

36

Respondent Profile

75%

22%

3%

None

One

Two +

# KIDS 8-14 IN HH# KIDS < 8 IN HH

KID AGE MIX

25%

53%

42%

19%

11%

None

One

Two

Three

Four +

29%

52%

3%

16%

8-14 only

8-14 and younger

8-14 and older

8-14 and both


# KIDS > 14 IN HH

63%

30%

6%

1%

One

Two

Three

Four +

OBJECTIVE & METHODOLOGY

38

Objective and Methodology

Objective

To understand the basic financial knowledge, attitudes, and behaviors of both parents of children ages 8-14 and their children ages 8-14.

Methodology

T. Rowe Price commissioned an online survey of parents of children ages 8-14 and their children ages 8-14.

The survey was fielded from 2/4/16 to 2/11/16, with parent quotas of approximately 50% men and 50% women.

A total of 1,086 parents and children ages 8-14 in the U.S. participated; the sampling error for a sample of 1,086 is +/- 3% at the 95% confidence interval.

The survey was fielded through MetrixLab, Inc.

T. Rowe Price 2016 Parents, Kids & Money Survey

THANK YOU.

CQPDJEJ5E

Economy & Finance

T. Rowe Price’s 2016 Parents, Kids & Money Survey