NEWARK, Del.--(BUSINESS WIRE)--Optimism and financial confidence is on the rise for parents saving for
college in the wake of the financial recession, finds the fourth “How
America Saves for College” national study from Sallie Mae and Ipsos.
Holding steady from last year, 51 percent of parents are saving for
college, ending the post-recession decline, and the annual amount they
saved increased 29 percent from the prior year to an average of $3,398.
“The recession tested family finances but parents never wavered from
their commitment to help their children pay for college,” said Charlie
Rocha, senior vice president, Sallie Mae. “Parents today have a renewed
spirit of financial optimism giving them the motivation to increase
their college savings fund and get back on track towards their goals.”
Saving for college continues to be a top savings priority for families,
second only to retirement. Of a family’s total savings, half was
designated for retirement and one-tenth for college. However, despite
the negative consequences of using retirement funds, nearly one in 10
parents say they’re planning to tap them to pay for college.
Nearly half of parents have a plan for how they will handle tuition
bills, expecting to cover 40 percent with income and savings,
considerably more than the 23 percent parents without a plan expect to
pay out of pocket. The most common college planning activities besides
saving money include investing in children’s skills with scholarships in
mind, AP courses to earn college credits and purchasing life insurance
to help cover the cost.
Not having enough money remains the top reason for not saving. Many
parents expect scholarships and financial aid to cover costs, some
simply don’t know their best options or they believe it is the child’s
responsibility to pay for college. High-income parents who are not
saving are four times more likely than low-income parents to say paying
for college is their child’s responsibility. What distinguishes families
who save from those who don’t is their stronger belief that college is
an investment in their child’s future and their willingness to stretch
Sallie Mae provides three ways to save for college: its Upromise
college savings rewards program that helps families save when making
everyday purchases from participating retailers, the SSgA
Upromise tax-advantaged 529 college savings plan, and high
yield savings accounts and CDs from Sallie Mae Bank, member FDIC.
The report, “How America Saves for College,” is based on a nationally
representative survey of 2,020 parents of children under age 18
conducted in November and December 2013. The full study and related
infographic are available at www.SallieMae.com/HowAmericaSaves.
Hear how America saves for college first-hand from YouTube sensations CJ
and Jake Booth interviewing parents about saving for college in a new video.
Join the conversation on how to save, plan and pay for college at Facebook.com/SallieMae and Twitter.com/SallieMae.
Sallie Mae (NASDAQ: SLM) is the nation’s No. 1 financial services
company specializing in education. Whether college is a long way off or
just around the corner, Sallie Mae turns education dreams into reality
for American families, today serving more than 25 million customers.
With products and services that include Upromise rewards, scholarship
search and planning tools, education loans, insurance, and online
banking, Sallie Mae offers solutions that help families save, plan, and
pay for college. Sallie Mae also provides financial services to hundreds
of college campuses as well as to federal and state governments. Learn
more at SallieMae.com.
Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are
not sponsored by or agencies of the United States of America.
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