Fifty-seven percent of parents are saving for college, up from 48% in 2015, and their average balance has soared 152%, from $10,040 last year to $16,380, according to a survey by Sallie Mae and Ipsos.
More than half, 55%, of parents feel confident they will be able to meet the cost of college, up from 42% in 2015. In addition, 88% of parents who have set a college savings goal are confident they will meet that goal, and 46% are saving for college using auto deposit.
“The higher levels of optimism, confidence and savings evident in this research correspond with other economic trends we are seeing, such as declines in unemployment and increased optimism about the economy among the U.S. public,” says Julia Clark, senior vice president of Ipsos Public Affairs. “The findings from this year’s study highlight the different ways that different generations view and value a college education—and, critically, their differing approaches to financial planning when it comes to their children’s future.”
The survey found that Millennials are more committed to their child’s education than other generations; 64% of Millennials are confident about meeting the cost of college. Sixty-five percent of Millennials are saving for future college costs, compared to 50% of Gen X and 61% of Baby Boomer parents. The average balance in Millenials’ college savings accounts is $20,155—compared to $12,428 for Gen Xers and $18,323 for Baby Boomers. Forty-four percent of Millennials are using 529 college savings accounts, compared to 36% of Gen Xers and 23% of Baby Boomers.
When it comes to who should be responsible for saving for college—parents or the children themselves—38% of Millennials think it is the parents, compared to 26% of Gen Xers and 18% of Boomers.
While 37% of parents among all age groups use 529 plans, up from 27% in 2015, the most commonly used vehicle is general savings accounts, used by 61% of parents, followed by checking accounts (38%). The research shows, however, that the account balance for parents using a 529 plan is 25% greater.
Fifty-one percent of parents have a plan to pay for college, up from 42% in 2015, and those with a plan have an average balance of $18,389, compared to $10,468 for those who do not. Seventy-one percent of parents believe that if a child knows that money has been set aside for their higher education, they are more likely to attend college. In addition, 85% of parents are willing to make financial sacrifices to fund their child’s college costs.
Sallie Mae and Ipsos surveyed nearly 2,000 parents in May and June.