As college costs surge, three-quarters of parents have started saving for their kids
A new study by Fidelity reveals saving for college continues to be a major priority for American families even as they face ongoing pressure from inflation and ballooning tuition fees.
The 2024 College Savings Indicator Study shows that three-quarters (74 percent) of parents have started saving for their children’s education, up from 58 percent in 2007 when the study was first conducted.
While there’s some debate over the cost-to-benefit ratio of a college diploma for today’s workers, 77 percent of the parents Fidelity polled are sure a college education is worth the expense, even though 30 percent aren’t certain how much they’ll have to pony up by the time their kids have to enroll, and 55 percent are making “their own best guess.”
“While parents prioritize their children’s college education, the reality is that balancing day-to-day expenses with long-term savings can be daunting,” Tony Durkan, vice president and head of 529 Relationship Management at Fidelity Investments, said in a statement.
The study found a dominant 93 percent majority of parents feel uneasy about inflation and rising college costs, while 87 percent are concerned about changes in education costs, such as free tuition or student debt forgiveness. Over a quarter (26 percent) cite inflation as the steepest barrier holding them back from adding to their children’s college education funds.
Despite these challenges, nearly two-thirds (64 percent) of parents have a plan to achieve their college savings goals. A solid 84 percent intend to either keep up or amp up their regular savings contributions for the rest of the year. However, while parents aim to cover 67 percent of their child’s education expenses, Fidelity estimates they are currently on track to
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