Sallie Mae's "How America Saves for College 2014" (PDF) study, conducted by Ipsos, finds that parents are financially optimistic and saving more for college, signaling economic recovery. 89% of parents value education as an investment in their children’s future. In fact, most parents are so confident in the success of a college education that 80% are willing to stretch themselves financially to save for college.
- The proportion of families saving for college declined during the recession from 62% in 2009 to 50% in 2013. In 2014, saving for college is on the rebound. The decline has halted at 51% of families, and the average amount saved for college has increased.
- The total average savings for higher education is $15,346 up from $11,781 last year.
- Families typically use two or more vehicles to save for college and are most likely to save for college in general savings accounts (45%), 529 College Savings Plans (29%) or a checking account (27%). 18% are supplementing their savings with a rewards program such as Upromise.
- Nearly half of parents saving for college have set a goal for the amount they want to save. They are slightly more likely to base their goal on what they can afford (28% of savers) rather than how much money will be needed (24%).
- Saving for college is a top priority for families, second only to retirement. 55% of families are saving for retirement followed closely by 51% who are saving for college. 53% of an average family’s savings are for retirement and 10% for college.
- Only 41% of families have created a plan for how to pay for college, yet planners are more successful savers. Parents with a plan have saved 83% more in their college-savings fund ($18,518) than savers who don’t have a plan ($10,105).
- arents with a plan expect to cover 40% of their children’s college costs with their income and savings, considerably more than those without a plan who expect to cover 23%.
- On average, those who plan for college costs began saving for college when their child was 5.9 and non-planner followed closely at 6.3.
Released in April 2014, the report, “How America Saves for College,” is based on a nationally representative survey of more than 2,000 parents of children under age 18.
For more information about this report and how families are saving for college, view the infographic: