New research from Sallie Mae discovered that while most parents believe a college education is a good investment for their child’s future, fewer than half are actually saving money to help their children achieve this goal.
The 2015 study, “How America Saves for College,” found that nine in ten parents believe a college education could benefit their children in the future, yet only 48% are putting money aside the occasion. Of the families who are not saving money, 61% said they do not have enough money to do so.
Of those saving for college, 62% said they were saving the same amount of money that they had last year, and 27% reported saving even more.
Parents are found to be saving less money than they had in previous years. While many parents are setting aside 10% of their total savings for a college education, the average amount set aside totaled $10,040 in 2015.
Parents who took part in the study noted that increased cost of living and unexpected expenses as the two most common reasons for saving less money.
Interestingly, single-parent households were found to save more, coming in at an average of $11,868, compared to households with parents living together, where the average savings was reported as $10,341.
The report also discovered that about half of parents reported using a general savings account to save for college. Only 27% took advantage of tax-exempt accounts such as 529 college savings plans.
Parents reported a number of different strategies for college savings accounts. The most popular method, used by 69% of parents, was to place all their college savings into a single savings instrument, 41% reported having funds automatically moved to a college savings account, 31% said a certain amount of each pay period was set aside for college savings, 26% said they made use of online tools and calculators to estimate college cost and savings goals, and 26% said they spent less on themselves in order to save more.
Parents who save for college reported different views on what to use to pay for college that families who had not saved. Families who have saved estimate that doing so will cover 56% total college costs, scholarships will cover about 23% and loans will cover the other 22%. Meanwhile, families who have not saved believe they can cover about 39% of college through savings accounts, scholarships will cover about 35% and loans will be used to cover the remaining 27%.
The report was conducted by French research firm Ipsos, who conducted 1,988 online interviews of Americans who have at least one child under the age of 18.
A separate survey released earlier this month found that many mothers of teenagers wish it had been suggested to them while pregnant to begin a college savings account, writes Kate Gibson for CBS News.
According to the College Board, the average rate of tuition and fees at public, four-year institutions has risen 42% in the past 10 years.