Sallie Mae and Gallup Research Reveals Families of All Incomes Are Saving For College Yet Most Fall Short of Goals

Average Parent Starts Saving for Higher Education as Child Enters Preschool
RESTON, Va.--(Business Wire)--
Families of low and modest incomes who are saving for college save as much or
more as a percentage of income as families in higher income brackets, says a new
study released today from Sallie Mae and Gallup. On average, parents who save
for college earmark 3.6 percent of annual income for their child`s education,
while households earning under $50,000 set aside 7.5 percent of their annual
income. Based on a nationally representative survey of more than 1,200 parents
of children under age 18, "How America Saves for College" identified savings
habits and motivators to encourage more families to save.

However, only 29 percent of families are on track to reach their savings goal.
The study estimates that parents would need to save an average of 5.7 percent of
income annually to meet their self-defined goal by the time their child goes to
college.

"The urgency of addressing college affordability has never been felt so strongly
across the full spectrum of American families," said Indiana Treasurer Richard
Mourdock. "We are fast approaching an era in which our retirees will be better
educated than our workforce-backwards momentum that we must reverse in order to
reclaim our leadership position on the world stage. These survey numbers suggest
that saving for higher education has become a high priority for the nation, and
we should encourage that commitment by providing creative solutions and support
for families of all income levels."

Among the study`s additional findings:

* Parents of children 12 and under are more likely than parents of teens to have
saved. On average, parents began saving when their oldest child was almost three
years old.
* Families saved an average of $2,676 for college annually, for an average total
of $13,827.
* Parents cited employer matching as the top motivator (66%) that would
encourage them to save for college, followed by tax benefits (44%). In addition,
25 percent indicated that a shopping rewards program would motivate them to save
for college.
* 529 college savings plans are gaining popularity, particularly among families
with younger children. While the overall 529 usage rate for savers was 33
percent, parents with children under age seven are twice as likely to turn to
529 plans (43%) as parents of teens (20%).
* Regardless of the parents` income level or child`s age when parents began
saving, the total amount saved increases steadily the longer that dedicated
savings vehicles are used. Parents of any income level who had saved seven years
or more accumulated two to three times the savings as parents in corresponding
income levels who saved for shorter periods of time.
* Families in the Northeast have saved the most with an average savings of
$15,846 closely followed by the West with $15,589. The South has an average
savings of $13,722 and the Midwest has the lowest with an average of $9,693.

"President Obama has set a goal of achieving the highest proportion of students
graduating from college in the world by 2020," said Albert L. Lord, vice
chairman and CEO, Sallie Mae, the nation`s leading saving, planning, and paying
for education company. "Students spend 12 years preparing academically, but too
many families overlook the need to prepare financially. Even a little bit of
savings set aside regularly over time can go a long way toward opening the doors
to a college education."

Sallie Mae helps families plan, save, and pay for college through its Upromise
program, which has helped families earn $500 million in college savings rewards,
and by administering 529 college savings plans, which offer tax-advantaged ways
to save. To help families develop a saving for college plan, Sallie Mae also
offers its free online tool, Education Investment Planner
(www.SallieMae.com/invest), which enables families to project the total cost of
college factoring in the child`s age, type of institution, and the historical
rate of increase in tuition.

"How America Saves for College" is part of a series conducted by Sallie Mae and
Gallup on how families save and pay for college, and the full report is
available at www.SallieMae.com/howAmericasaves.

SLM Corporation (NYSE:SLM), commonly known as Sallie Mae, is the nation`s
leading provider of saving, planning and paying for education programs. Through
its subsidiaries, the company manages $188 billion in education loans and serves
10 million student and parent customers. Through its Upromise affiliates, the
company also manages more than $19 billion in 529 college-savings plans, and is
a major, private source of college funding contributions in America with 11
million members and more than $500 million in member rewards. Sallie Mae and its
subsidiaries offer debt management services as well as business and technical
products to a range of business clients, including higher education
institutions, student loan guarantors and state and federal agencies. More
information is available at www.SallieMae.com. SLM Corporation and its
subsidiaries are not sponsored by or agencies of the United States of America.

Gallup has studied human nature and behavior for more than 70 years. Gallup`s
reputation for delivering relevant, timely, and visionary research on what
people around the world think and feel is the cornerstone of the organization.
Gallup employs many of the world's leading scientists in management, economics,
psychology, and sociology, and our consultants assist leaders in identifying and
monitoring behavioral economic indicators worldwide. Gallup consultants also
help organizations boost organic growth by increasing customer engagement and
maximizing employee productivity through measurement tools, coursework, and
strategic advisory services. Gallup's 2,000 professionals deliver services at
client organizations, through the Web, at Gallup University's campuses, and in
40 offices around the world. For more information go to www.gallup.com.

Sallie Mae
Erica Eriksdotter, 703-984-5628
erica.eriksdotter [at] salliemae.com
or
Gallup
Eric Nielsen, 202-715-3030
eric_nielsen [at] gallup.com

Copyright Business Wire 2009