As the cost of college in the U.S. continues to rise, parents are saving more for their child’s higher education expenses – but are not expecting to foot the entire bill themselves.
According to a new survey from Fidelity, parents expect their children to pay a larger share of the costs – an average of $15,385. That’s up from $12,431 in 2016. Less than half of parent-respondents reported feeling as though it was their obligation to cover college expenses themselves.
At the same time, more parents are postponing having the discussion with their child about how much they expect them to contribute to their own education. Forty percent of people with sophomore-age children or older hadn’t communicated those funding expectations, up 9 percentage points over 2016.
Thirty-seven percent of parents are starting to save for higher education costs before their child turns 2, Fidelity reported. Despite this, just over one quarter of savers report being on track to meet their college funding goals.
It’s no surprise families are having trouble saving for the costs of higher education in the U.S.: For the 2017-2018 school year, the average total tuition and fees, including room and board charges, in the public four-year sector rose to $20,770, according to College Board. Meanwhile, total average charges for out-of-state tuition at public four-year institutions during the same time period were $36,420.
Student loan debt is becoming a larger problem for younger generations. According to Northwestern Mutual’s 2018 Planning and Progress Study, student loans comprised 6 percent of the average person’s debt load. For millennials, however, it made up 28 percent.
More than 44 million Americans have student loans, with debt loads averaging about $32,700 per person. That’s an increase of about 20 percent since 2015-2016.