Seventy-two percent of American families are saving for their children’s higher education, a 24% increase from 58% in 2007, when Fidelity Investments’ College Savings Indicator Study was first published.
Also encouraging, 41% of families are invested in a 529 college savings plan, a 62% increase from the 26% measured in 2007.
The median amount saved for college this year is still a modest $3,000, but this is double the figure from 2007. Among 529 plan owners, 45% have increased their contribution rate in the past 12 months. However, 49% are not sure they will reach their college savings goal, and only 29% are actually on track to achieve that goal. Half of parents of children in 10th grade or higher say that looking back over the past 10 years, they could have saved an average of $200 more each month for their child’s college education.
Forty-one percent of parents are working with a financial professional, up from 21% in 2007. Although 70% of parents think that family contributions will be helpful for saving for college, only 28% of grandparents have asked how they can help pay for their grandchildren’s college education, and only 39% of parents have asked family and friends to contribute to their college savings account in lieu of special occasion gifts.
“For many families, finding an extra $50 or $100 per month may seem out of reach, but these extra dollars could potentially boost college savings by nearly $20,000 or even $40,000,” says Keith Bernhardt, vice president of college planning at Fidelity. “This potential could be a powerful motivator to consider strategies to carve out additional savings.”