Families Report High College Savings Goals, But Don't Have a Plan to Meet Them, Reveals New National Study from Sallie Mae
Sallie Mae Provides Resources, Recommends Parents of Infants Through Teens Create a Plan to Save
NEWARK, Del.--(BUSINESS WIRE)-- Despite rising college costs, fewer American families with children under age 18 save for college (50%) than did just two years ago (60%), according to a research report released today from Sallie Mae and Ipsos. While nearly all parents believe college is an investment in their child's future, only one-third have a plan to pay for college. Many families not yet saving for college give non-monetary reasons that may be overcome with more financial education. As part of America Saves Week, Sallie Mae encourages families to start making saving for college a habit today.
"Households from all income groups are more likely to save successfully with a plan," said Nancy Register, director of America Saves - a national social marketing campaign that encourages individuals and families to save money and build personal wealth. "As the cost of college continues to rise, America Saves Week, now through March 2, is a great opportunity for parents and their children to make a plan to save for college."
"We are concerned that many families are putting off financial preparations for college," said Sallie Mae President & COO Jack Remondi. "Saving even small amounts can add up over time, and every bit helps. Sallie Mae is committed to offering tools and resources to help."
When asked to describe their feelings about saving for college, parents' top answers were overwhelmed, annoyed, frustrated, scared, or that they don't like thinking about it at all. Among those not saving, 47 percent cite a barrier other than money. Top reasons included thinking that children would be awarded enough financial aid to cover the cost of college, children are too young or too old, uncertainty about which savings option to use, procrastination, and feeling it is the child's responsibility to pay for college.
Starting to save is most frequently prompted by major milestones such as a child's birth (34%), starting school (24%), or learning about college costs from friends and family (20%).
Slightly more than one quarter (27%) of parents who are saving for college use a 529 college savings plan. However, more parents save for college using general funds or CDs (42%) and may miss out on tax incentives offered by a 529 account.
Sallie Mae's Upromise college savings rewards program helps families save little by little as they make everyday purchases, Sallie Mae's subsidiary Upromise Investments, Inc., and its affiliates, administer tax-advantaged 529 college savings plans in 16 states, and the Sallie Mae Bank offers savings accounts and CDs. Tools to help understand the future costs of college and create a plan are available at Salliemae.com/invest.
The report, "How America Saves for College," is based on a nationally representative survey of 1,621 parents of children under age 18. The full study and related infographic are available at www.SallieMae.com/HowAmericaSaves.
Sallie Mae (NAS: SLM) is the nation's No. 1 financial services company specializing in education. Celebrating 40 years of making a difference, Sallie Mae continues to turn education dreams into reality for American families, today serving 25 million customers. With products and services that include 529 college savings plans, Upromise rewards, scholarship search and planning tools, education loans, insurance, and online banking, Sallie Mae offers solutions that help families save, plan, and pay for college. Sallie Mae also provides financial services to hundreds of college campuses as well as to federal and state governments. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.
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