According to Fidelity Investments, an independent financial services firm, Americans are saving for college at an unprecedented rate. The surveys began seven years ago when 2,500 parents nationwide were asked about their college savings funds for their children. Last year, surveyed parents put aside $5,000 on average. This marks a 58 percent increase since the 2007 survey, and the highest percentage since the survey’s inception.
Unfortunately Just Not Enough
Despite record-breaking savings for college, families are still falling short. An improving economy, escalating costs, and increased awareness of other savings vehicles such as 529 savings plans are all seemingly behind the rising costs. Unfortunately, these families remain far away from the goals which really weren’t too lofty to begin with.
In response to the survey, roughly two-thirds of participants stated that they have a savings plan in place. They also stated that they plan to cover roughly 62 percent of costs. However, data shows that they’re really only on track to cover about a third of the costs of a college education. Between 2002 and 2011, it is estimated that the costs of college tuition have risen about 75 percent.
The moral of the story is: keep saving, and don’t ever stop.