Sallie Mae's "How America Saves for College 2010" study (PDF, 2.49MB), study finds that American families rank saving for college as high a priority as saving for retirement, with one in five naming it their top saving priority. Based on a nationally representative survey of parents of children under age 18, the study found that:
- 60% of parents have saved for their child’s college education, about the same as last year despite the difficult economic environment, and are on track to save $48,367 on average by the time their child turns 18.
- Nearly half of those not saving for college do not know how (18%) or are not sure which are the best college savings options (28%).
- 24% of saving-for-college parents risk their financial future by using retirement accounts to save for college and make other costly mistakes by not investing in tax-advantaged options, such as 529 college savings plans. Across all parents saving for college, the average amount saved for college in retirement accounts is $6,503, compared to $3,340 in 529 college savings plans.
- Although each state offers 529 college savings plans with low fees and tax incentives benefiting all income levels, half of those not currently using one say that they are not at all familiar with 529 plans.
How the typical family saves for college: Average amount of total college savings saved in each vehicle
Top savings priority: year-over-year
Released in October 2010, “How America Saves for College 2010” (PDF 2.49MB) is part of a series conducted by Sallie Mae and Gallup on how families save and pay for college. To view the “How America Pays for College” studies from 2010 to 2008 please visit www.SallieMae.com/HowAmericaPays/.