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More Parents Saving More Money for College
Special to The Truth
The number of parents
saving for college and the amounts they are saving are both
at four-year highs, according to “How America Saves for
College 2016,” a recent national study by Sallie Mae and
conducted by Ipsos.
The new report reveals
that 57 percent of today’s parents are saving for college,
up from 48 percent in 2015, and the average amount saved is
$16,380, up from $10,040 the year prior.
In this climate of
increased savings, over half of all parents feel confident
they’ll be able to meet college costs, and the vast majority
of parents who have set a savings goal are confident they’ll
meet their goal.
“These higher levels of
optimism, confidence, and savings correspond with other
economic trends we’re seeing, such as declines in
unemployment and increased optimism about the economy among
the U.S. public,” says Julia Clark, senior vice president,
Ipsos Public Affairs.
Here are some of the
reports key findings:
Millennials Most Committed
Millennial parents -- age
35 or younger -- feel more confident than other generations
about meeting college costs, and they’re more committed to
saving for college. More Millennials are saving (65 percent,
vs. 50 percent of Gen X parents and 61 percent of Baby
Boomer parents), and Millennials have saved more money
($20,155, on average, vs. $12,428 for Gen Xers and $18,323
for Baby Boomers).
When it comes to paying
for college, a greater percentage of Millennial parents
believe the parent should be solely responsible compared to
their Gen X and Baby Boomer counterparts.
More 529 College Savings Plans
While use of 529 college
savings plans among parents rose to 37 percent, up from 27
percent the prior year, these tax-advantaged plans still lag
far behind general savings accounts, despite the fact that
those who use 529 plans save roughly 25 percent more, on
average.
More Parents Making Plans
The proportion of parents
with a plan to pay for college rose to 51 percent in 2016,
up from 42 percent in 2015. Parents with a plan save
significantly more: $18,389, on average, compared to the
$10,468 reported by parents without plans.
Additionally, nearly
three-quarters of parents agree that students are more
likely to attend college if they know savings have been set
aside for them.
“Preparing for college
requires significant personal and financial commitment, and
it’s gratifying to see so many parents, and especially
younger parents, taking proactive measures to make college
possible,” says Raymond J. Quinlan, chairman and CEO, Sallie
Mae.
The full “How America
Saves for College 2016” report and a related infographic are
available at SallieMae.com/HowAmericaSavesForCollege. Join
the conversation at Facebook.com/SallieMae or #HowAmericaSaves.
If your family is
currently saving for college or planning to get started, the
experts at Sallie Mae recommend the 1-2-3 approach: first,
open a savings account; second, set a goal and make deposits
regularly; and third, explore tax-advantaged options such as
529 college savings plans.
“Above all, these study
results provide tangible evidence of the value parents
continue to ascribe to higher education,” says Quinlan.
Courtesy StatePoint
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