Big Name Colleges Offer Better Preparation for Workforce, Say Teens

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Saving for college remains the No. 1 financial priority among today’s teens

Growing Emphasis on Saving for College

80 percent of today’s teens believe a college education is essential to future success, compared to 60 percent of adults who thought so when they were teens.

Big name colleges prepare students for the workforce better than state schools. That’s according to the majority (56%) of teens who took part in an annual survey released by TD Ameritrade Holding Corporation (NASDAQ: AMTD). But that doesn’t mean they think it’s worth the price tag.

While 19 percent of teens feel that the tuition from a “big name” school such as Harvard, Yale, Princeton or Northwestern is worth the expense because the name helps secure employment, more (40%) teens agree that the value of an education from such a college is important, but not necessary. Another 15 percent said big name schools are not worth the cost because they don’t guarantee a job.

Big name school or other, the plea for a higher education endures. Ninety-one percent of today’s teens are enrolled or plan to enroll in college, compared to 72 percent of adults surveyed who said they attended a higher education program (55 percent of adults actually graduated). And 80 percent of today’s teens believe a college education is essential to future success, compared to 60 percent of adults who thought so when they were teens.

“Bleak job reports are no doubt a cause for concern among young people as they think about their post-college years, an issue that is likely contributing to these attitudes,” said Stuart Rubinstein, managing director of online engagement at TD Ameritrade, Inc. (“TD Ameritrade”), a broker-dealer subsidiary of TD Ameritrade Holding Corporation. “But the silver lining among teens is the eagerness to further their education, and their instincts to start saving now.”

Today’s teens have made saving for college a top priority. Sixty-eight percent of teen savers are saving a portion of their own money to pay for college, up slightly from 62 percent of teens in 2009, and compared to 40 percent of adults who said they did the same when they were teens.
And teens aren’t the only ones who are more disciplined about saving for college. Nearly half (48%) of them said their parents regularly put aside money for their college tuition. That compares to 26 percent of adults who said their parents did the same when they were teens.
And with 68 percent of teens planning to pursue an advanced degree, such as a master’s or Ph.D., advance saving is even more critical.

Rubinstein recommends the following tips to help families properly prepare for education expenses, no matter what school they choose:

1. Get an Early Start.
The first step is for parents to start a savings and investing plan early – even if they can only afford a small amount – and contribute to it regularly, increasing the contributions when they can. If parents expect their children to contribute, they should set that expectation early and have the teens contribute as they begin to work.

2. Assess the Details.
Parents and teens should analyze their current situation together, taking into account what they already have saved for college and how long it will be before the first year of school begins. TD Ameritrade provides access to a college planner that can help you determine savings goals for college tuition costs and calculate the amount that would need to be invested each year to pursue that goal.

3. Select an Education Savings Vehicle.
After parents and teens have assessed their financial status and anticipated their impending needs, the next step is to compare the features of different education savings choices, such as a 529 College Savings Plan, custodial account, or Coverdell Education Savings Account, to determine which may be the best fit.

4. Monitor Your Financial Progress Together.
It is not enough to simply establish a savings plan. You must monitor your progress along the way to ensure your strategy is helping you stay on track to meet your financial goals. Keeping score along the way is an important responsibility that can be shared by both parents and teens.

5. Ask for help.
For those looking for professional advice, an independent registered investment advisor (RIA) can work with parents on building a plan for investing and paying for college. TD Ameritrade’s AdvisorDirect TM service can refer investors to a knowledgeable RIA who specializes in their areas of need, including college planning.*

For more information on the various college savings options available to parents and teens planning for education expenses, visit TD Ameritrade’s website.

Survey Methodology
These results are based on a survey conducted by ORC International of Princeton, New Jersey, on behalf of TD Ameritrade Holding Corporation. Six hundred ninety one (691) adults who are age 20 to 59 along with 304 teenagers age 14-19 participated in a telephone survey conducted May 19-23, 2011. Survey participants across the country were asked to share their views on how the current economic environment has affected their lifestyle and outlook. The margin of error among the adults 20-59 in this survey is ±4%; among the teenagers, the margin of error is ±6%. This means that in 19 cases out of 20, survey results based on 691 respondents will differ by no more than 4 percentage points in either direction from what would have been obtained by seeking the opinions of all eligible U.S. adults who are 20 to 59 years of age. Similarly, the results of the survey among teenagers will differ by no more than 6 percentage points in either direction. ORC International and TD Ameritrade Holding Corporation are separate, unaffiliated companies and are not responsible for each other's products and services.

About TD Ameritrade Holding Corporation
For more than 36 years, TD Ameritrade Holding Corporation (NASDAQ: AMTD) has been in the business of serving individual investors – either directly or through a network of independent registered investment advisors. Through its brokerage1 and education2 subsidiaries, TD Ameritrade combines innovative trading technology, easy-to-use trading tools, investment services and education, and superior client service to create a market-leading financial services experience. Home to Kiplinger's #1 online broker3 and Barron’s #1 online broker for “Options Traders,”4 TD Ameritrade provides millions of retail investors, traders and independent registered investment advisors with the tools, service and support they need to help build confidence in today's rapidly changing market environment. For more information and resources for journalists, please visit the TD Ameritrade newsroom at

1TD Ameritrade, Inc., member FINRA ( /SIPC ( /NFA (, and TD Ameritrade Clearing, Inc., member FINRA/SIPC.

2Investools, Inc. is an education subsidiary of TD Ameritrade Holding Corporation. Investools does not provide financial advice and is not in the business of transacting trades. Investools, Inc. and TD Ameritrade, Inc. are separate but affiliated companies that are not responsible for each other's services or policies.

3TD Ameritrade was ranked #1 and received an overall score of 5 stars (tied for first place with one other broker), in the Kiplinger's Online Broker Ratings, Kiplinger's Personal Finance, 02/2011. Fourteen brokers were rated in the categories: Costs, Web site usability, Investment choices, Customer service, and Research and tools.

4TD Ameritrade was awarded an overall 4½ out of 5 stars and was named "Best for Option Traders" in Barron's 2011 Online Broker Survey, 03/2011. TD Ameritrade also received the highest rating, 4½ out of 5 stars, in the "Best for Long-term Investing" category, sharing that rating with only one other broker. TD Ameritrade was evaluated versus 23 other online brokers in eight total categories, including trade experience, trading technology, usability, range of offerings, research amenities, portfolio analysis and reports, customer service and education and costs. Barron's is a registered trademark of Dow Jones & Company © 2006-2011.

*Potential AdvisorDirect clients should typically have at least $200,000 in assets to invest. Some RIAs have higher or lower minimum asset requirements. There is no charge or obligation for the initial consultation with the RIA. Once you select an RIA, you will pay advisory fees and standard brokerage fees. Brokerage transactions executed through TD Ameritrade are subject to standard transaction charges. You should review an RIA’s Form ADV, other applicable advisor disclosure document(s) and the AdvisorDirect Disclosure and Acknowledgement Document prior to engaging an RIA. The Form ADV contains important disclosure information relative to an RIA’s services and fees. RIAs charge an ongoing investment advisory fee for their services. RIAs will pay TD Ameritrade fees for their participation in the AdvisorDirect program. Those fees will usually constitute a percentage of the advisory fees you will pay your RIA. For additional details about the fees paid to TD Ameritrade and other conflicts of interest, please review the AdvisorDirect Disclosure and Acknowledgement Document and ask your RIA about its specific arrangement with TD Ameritrade. You are solely responsible for evaluating any advisor that you are considering. Please note: Under no circumstances should participation by a certain RIA in AdvisorDirect be considered an endorsement or recommendation by TD Ameritrade for that particular RIA.


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