Can Americans Keep Up with the Rising Cost of College?

Parents across America are making a concerted effort to keep up with soaring tuition tabs.

College saving reached an all-time high in 2016, according to Fidelity’s 10th Annual College Savings Indicator Study. Yet, even with 72% of the families surveyed stashing away cash for tuition, Americans are still falling short of the skyrocketing costs.

It’s no secret, college is expensive. Last year, the average tuition for a private, non-profit, four-year degree clocked in at a cool $32,405, while a public, four-year, in-state degree cost $9,410, as tracked by the College Board. “There’s a lot of dialogue going on around the cost of college, and there’s an awareness that the costs continue to increase,” Keith Bernhardt, Vice President of College Planning at Fidelity, tells

It is these exorbitant price tags, Bernhardt believes, that have made college-specific savings part of the national dialogue. The use of dedicated college savings accounts is at an all-time high with 41% of families owning a 529 plan, according to Fidelity. While Bernhardt cites this as a positive step forward, he acknowledges families can be doing more to reach their goals.

For those of us with degrees, we know the costs of college continue far beyond graduation.

“Part of the dialogue is the type of debt some students are graduating with… it’s a significant debt-load for people just coming out of college, trying to start their lives.” This debt, unlike other debts, is significant because there is no Chapter 11; you either pay it in full or it follows your forever.

So with nearly $1.3 trillion outstanding in student loan debt, according to the New York Federal Reserve, is it any wonder American families are so concerned? While Fidelity finds a 24% increase in college savings among American families since 2007, the study also notes that parents are on track to reach less than one-third of their funding goals by the time their children head off to campus. The median amount American families saved for college last year was $3,000, and, upon reflection, nearly half of parents wish they would have saved an extra $100 or more each month. But the reality is, in tough economic times, stashing away that extra cash isn't always an option.

“People have priorities. That’s priorities with an ‘s’ at the end. There’s not just one savings goal that people have,” Bernhardt explains.

So what steps can families take to plan for the costs of higher education?

“It is a struggle,” admits Bernhardt; “what can be easy is getting started and saving what you can.” Be aware of individualized familial expectations regarding goals, the type of institution your child wants to attend, financial aid qualifications and timeline, Bernhardt advises.

Greg McBride, Chief Financial Analyst at, tells parents should start early.

“You have 18 years to plan for it. Squirreling away a modest sum each year from birth through high school can build a healthy sum that defrays the need for borrowing later,” recommends McBride.

An extra $50 a month starting at birth could grow to $20,000 by the time your child turns 18, notes Fidelity.

Another method to consider? Tax-advantaged options, which can help grow one's savings from an investment perspective. “Avoiding taxes on your earnings could make a big difference, particularly if you have a long runway,” says Bernhardt. And dedicated savings accounts often help people save more, according to Fidelity.

McBride's best advice? “Every dollar that is saved ahead of time is one less dollar that needs to be borrowed later on.”