Are Americans Saving Enough for College? Ipsos Public Affairs/Sallie Mae How America Saves for College Report 2013
In 2011, America sent nearly 22 million people to college. With tuition prices on the rise many American families are getting a head start on saving for college. Are they doing enough though?
In a report published today by Sallie Mae and conducted by Ipsos Public Affairs, we illustrate the current trends in how American families are preparing for their financial investment in higher education.
Half of US families are saving for college. Of these, 34% have been saving since the birth of their child. With parents starting to think about college expenses so early, it is not surprising to find that 70% of savers are confident they will reach their expected college savings goals by the time their children begin college. However, our projections show that parents may be over-confident about their ability to save for college, as our calculations suggest that they will save less than half of what they expect to save.
Of the families that are not saving, 53% say it is because they do not have enough extra income, and 47% give reasons like scholarships expectations, competing priorities, procrastination, and that they expect their child to take responsibility for paying for college. For families who have not started saving for college, 45% say they are currently focusing on other priorities. This is likely a response to a protracted, weak economy with parents focusing more on short-term saving goals instead of longer-term goals such as saving for college.
In addition, the report goes into more detail on exactly when parents plan to save, where savers invest/save their money, what plan savers have in place to build their savings, as well as why people do not save for college. The report also compares this years’ study to previous studies conducted in 2009 and 2011.
For the full report, please click here.