Industry Benchmarks-529 College Savings Plans

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529 College Savings Cost Per Acquisition

15% is the average customer attrition rate among retail banks per year. $200 is the average acquisition cost for a new banking customer.

529 college savings plans

  • 529 college savings plan is a tax-advantaged savings plan designed to encourage savings for future education costs.
  • The 529 educational savings plan lets a saver open an investment account to save for the beneficiary’s future qualified higher education expenses — tuition, mandatory fees, and room and board.
  • Education savings plan can also be used to pay up to $10,000 per year per beneficiary for tuition at any public, private or religious elementary or secondary school.
  • The rising cost mirrors growing use of 529 plans on which total assets held in state-sponsored plans grew from an inflation-adjusted $176.2 billion in 2010 to $318.7 billion in 2017 which is an increase of 81%.
  • The number of accounts rose from about 10 million in 2010 to 13 million in 2017, an increase of 30% where the jump occurred as the population under 18 remained fairly flat, dropping slightly from 74.2 to 73.7 million, which is a decline of 0.7%.
  • The average account size also grew by 39% in real terms from 2010 to 2017 to an all-time high of $24,057.
  • While online lenders experiment with offline marketing tactics, banks are aggressively ramping up their online marketing efforts with total digital ad spend by the U.S. financial institutions predicted to top $10 billion in 2019 (up from $5.3 billion in 2013).
  • 15% is the average customer attrition rate among retail banks per year.
  • $200 is the average acquisition cost for a new banking customer.
  • Customer attrition within the first 3 to 6 months can be up to 200% higher than higher annualized attrition rates.
  • Estimates from a 2017 survey indicates that 6.5% of households in the United States were unbanked in 2017 which is approximately 8.4 million households. An additional 18.7% of the U.S. households (24.2 million) were underbanked, meaning that the household had a checking or savings account but also obtained financial products and services outside of the banking system.

Your Research team applied the following Strategy:

Despite an extensive search, we were not able to identify the cost per acquisition specific to 529 college savings plans and related financial services.

We began our research by searching pre-compiled information to find the total cost to acquire one new account of 529 college savings plans. We searched industry organizations and government websites to find data or statistics for the specific type of account regarding 529 college savings plans in sources such as, SEC, FinAid, FINRA etc. However, these sources only provide information on acquiring and investing this type of savings plans. Then, we also examined media sources such as CNBC, Forbes, Financial Advisor, American Funds, Morningtar, Washington Post and others, but we only found information on some of the providers in the industry concerning 529 plans.

Further, we tried to find out the cost of the leading provider of 529 college savings plans in the industry to find the total cost per acquisition per new account holder. We looked through published reports, news, articles in sources such as The Balance, Cappex, CNBC, NY Times, Forbes etc. We found out that the leading or largest college savings plans provider is the Virginia’s CollegeAmerica which has 529 plan advisor-sold and holds $64.2 billion in assets under management. Then, we tried to look into the annual reports, press releases, and news of CollegeAmerica from The goal was to find the total cost acquisition for their 529 college savings plans. However, we only found from their reports the growth of assets under management from the CollegeAmerica 529 plans program and no other data that could be used to triangulate the total cost of acquisition.

Since there is limited data available for specific 529 college savings plans, we broadened our scope to find cost per account acquisition related to financial services. We tried to look first for the leading company in the financial services' industry from articles, news, reports, etc. in sources such as Bank Rate, NerdWallet, Smart Asset, Forbes, The Balance and among others. We found JP Morgan Chase to be the leading company in financial services. We scanned their annual reports, press releases, and news to look for their cost per acquisition for a new account. But, we were unable to detect data that could be used to triangulate the total cost of all ad spend or number of accounts acquired by the customers.

Finally, we expanded our scope even further and searched for cost per acquisition of banks in general, since most of their offerings focus around accounts. We looked for data and statistics in sources such as US News, Bank Direct, The Financial Brand, FICO, and others. However, the sources provided information on net interest rates, service, and other fees for acquiring savings and checking accounts from banks as well as other banking consumer surveys. We were not able to find data for the cost per acquisition concerning general savings account.