Most American Families Are Not Saving For Children's College, According to Morgan Stanley Survey.

Business Editors

NEW YORK--(BUSINESS WIRE)--March 20, 2002

More than half of American families who plan to send their children to college have not started saving to pay for it and are unaware of new tax-advantaged investment options that make college savings easier, according to a national survey conducted by Morgan Stanley.

According to the online/e-mail survey of 1,079 American families, 67 percent of those who plan to send their children to college believe they are not saving enough to pay for it, and 54 percent have not started saving at all.

Three quarters of respondents said they are unaware of "529" college savings plans, enacted by Congress in 1997 to enable flexible and tax-advantaged college savings. Morgan Stanley manages College SAVE, a 529 plan enabling parents and others to choose from different risk levels and return potentials. A College SAVE account can be opened with as little as $25.

"When it comes to paying for college, savings delayed are often savings denied," said John H. Schaefer, President of Morgan Stanley Individual Investor Group. "College SAVE is one way Morgan Stanley Financial Advisors help clients with an affordable, long-term investment plan to pay for college education."

"The first lesson in college savings is to start early with a portfolio that fits your goals and risk tolerance," said Mitchell M. Merin, President of Morgan Stanley Investment Management. "With College SAVE, investors can choose their investment strategy and let Morgan Stanley's leading investment team do the rest of the work."

Underscoring the need to invest and save as soon as possible, the survey indicates that 70 percent of American families who have started investing and saving for their children's college education did so before their child reached age five. Twenty-one percent started saving when their child was six to ten years old.

Morgan Stanley manages College SAVE for the Bank of North Dakota, and College SAVE is available throughout the United States. For more information on College SAVE, visit www.collegesave4u.com.

Morgan Stanley (NYSE: MWD) is a global financial services firm and a market leader in securities, asset management and credit services. With more than 700 offices in 28 countries, Morgan Stanley connects people, ideas and capital to help clients achieve their financial aspirations.

Survey Methodology: Results were taken from an online/e-mail survey conducted among a national probability sample of 1,079 adults during the period October 9 to October 15, 2001. The survey was conducted on behalf of Morgan Stanley by Equation Research of Sestes Park, Colorado. Results are considered statistically accurate to within plus or minus three percentage points.