LifeCare Poll Reveals No College Funding Plan In Place for One-Third of Parents

WESTPORT, Conn., June 18, 2004 – An alarming number of people have no plan in place for funding their children's college education, according to a recent poll conducted by LifeCare^®, Inc., the nation's exclusive provider of Life Event Management^® Services. The poll, conducted on the LifeCare.com web site as part of the company's ongoing series of monthly polls, asked client employees to identify the primary source of funding for their children's college education. Thirty-three percent of respondents said that they have no financial plan in place—the number one response; 28 percent identified 529 Plans as their primary source of funding; 18 percent cited stocks/bonds/mutual funds/CDs; 17 percent cited personal/home equity loans; and two percent said a Roth IRA is their top source.

“These findings may be unsettling,” says LifeCare CEO, Peter G. Burki, “but savvy employers will view this as a tremendous opportunity—the chance to give their employees much-needed assistance in preparing for their children's future. Employers who seize these kinds of opportunities reap significant rewards in terms of employee satisfaction and loyalty.” And LifeCare is providing a growing number of proactive employers with tools for doing so.

According to Burki, tuition planning assistance is a creative and cost-effective way for employers to attract and retain top talent, and also boosts a company's recruitment and retention levels. LifeCare offers a subsidy administration service that helps employers administer their built-in tuition or scholarship assistance programs or LifeCare can deliver them directly, further reducing administrative costs for HR departments.

“Parents don't have to be the sole source of funding for their child's college expenses,” says Burki, “and LifeCare's academic counselors are on-hand 24/7 to help them identify and understand their option—from popular savings vehicles such as mutual funds, 401(k)/403(b) plans, CDs, Money Market Accounts and 529 plans to financial aid, scholarships, grants, loans, work-study programs, and more.” Burki points out that millions of education dollars go unawarded each year—very often because parents and students are unaware of the financial aid application process or believe they're ineligible.

Under a partnership with Sallie Mae^®, the nation's leading provider of education funding, LifeCare offers client employees online access to applications for both federal and private loans; loan calculators; information on scholarships; tips on tax credits, including 529 savings plans options; and a test preparation tool that helps students prepare for college entrance exams.

For companies that have large and dispersed employee populations, Burki recommends including college and financial planning topics in their e-learning curriculum—a unique, low-cost and convenient method of instruction. He says LifeCare's “Budgeting Basics” seminar was one of the most frequently requested e-learning employee seminars in 2003, and the company's growing seminar series now covers 100 topics, including “Preparing for and Applying to College.”

Outside of buying a home, financing a child's college education can be the single largest expense most Americans face. According to the College Board, a not-for-profit association of more than 4,500 educational institutions, the average annual cost at a four-year public college has increased more than 14 percent over last year. “As the price of a college education continues to escalate and enrollment remains near historically high rates, there's a real need among parents for this type of financial planning assistance,” says Burki. “It's an opportunity for employers to provide a meaningful benefit that also proves they care about employees' personal lives.”

College Funding Is Increasingly Important to LifeCare Clients

In 2003, assistance with academic issues was among the top-five work/life services requested by LifeCare client employees, and individuals accessing LifeCare's telephone- and web-based services last year reported that LifeCare saved them, on average, 15.5 hours of time per request.

“The bottom line is that employees want and need help planning for the expense of their children's college education just as they need guidance on other financial issues such as buying a home or planning for retirement,” says Burki. “Through our programs, we're providing employees with some options and guidelines for saving, so the reality of college expense won't seem so overwhelming for them when the first tuition bill arrives.”

Notes to Editors

Peter Burki is available for interview.

About LifeCare^®, Inc.

LifeCare, Inc. is one of the largest privately owned employee benefits organizations in the U.S. and the exclusive provider of Life Event Management^® Services. With 20 years of experience in delivering highly personalized counseling, education and referral services, LifeCare helps employees manage the day-to-day challenges of their lives. In turn, LifeCare helps employers improve employee commitment, recruitment, retention and workplace productivity. LifeCare currently serves 1,000 client companies with four million individuals within health plans, governmental agencies, unions and corporations. For more information, visit www.lifecare.com.

Media contact: Jim Derivan
LifeCare, Inc.
pr1@lifecare.com
203-291-4196