The percentage of parents saving for their children’s college expenses keeping growing, but as honorable as their intentions are — it may not be enough with surging tuition costs.
Nonetheless, there are hopefully signs, according to Fidelity Investments‘ 9th annual College Savings Indicator Study.
Fidelity says that saving for college has reached an all-time high with 69 percent of families currently saving (up from 64 percent in 2014). And more parents are using strategic financial plans to help achieve their college goals (62 percent, up from 59 percent last year) and using tax-advantaged 529 savings accounts (39 percent, up from 32 percent in 2014).
More parents are also intending to shoulder a larger portion of the anticipated college costs for their children—66 percent, continuing an upward trend from 57 percent in 2012.
However, Fidelity points out, parents still have some work to do on the savings front, as households are now on track to save just 27 percent of their college funding goals by the time their child is ready to head to campus.
“It is critical that parents of all ages establish college savings goals that are practical for their family’s individual circumstances, and get the guidance they need to ensure they have an effective savings strategy to help them achieve those goals,” said Keith Bernhardt, vice president of retirement and college products at Fidelity.
Millennial parents (born between 1981 and 1997) appear particularly determined to help their children avoid significant student loan debt, adopting smart savings habits at a higher rate than their older counterparts to accomplish this goal, Fidelity states.
This is an encouraging trend, as this generation plans to cover nearly three quarters (74 percent) of their children’s college costs, an even greater portion than older generations. Moreover, nearly half (46 percent) intend to bankroll their children’s full college bill.