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How America Saves for College 2014

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).
  • Parents 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: