As college costs continue to grow, more families are making it a priority to save for higher education.
A study released today by Fidelity finds that 69 percent of families are currently saving for college, up from 64 percent last year. The study also finds that more parents are developing financial plans to help reach their goals and more are putting money into 529 accounts.
That confirms the mid-year report from the College Savings Plan Network, which found that the total investment by Americans families in 529 plans in the first half of 2015 reached a record $258.2 billion, up 5.6 percent from the previous year.
Fidelity’s report found that parents aim to cover at least two-thirds of their children’s college costs, but the average family is on track to save just 27 percent of their college funding goals by the time their child reaches college age.
Millennial parents are among the most ambitious when it comes to paying for their children’s college, intending to cover an average of 74 percent of their children’s college costs. Nearly half of millennial parents plan to cover the entire bill.
The Fidelity study attributes millennials’ ambitious college savings plans to their own struggles with student debt; 56 percent of them are still paying back their own student loans. Nine in 10 of those paying off their own college debts plan to re-allocate those payments to savings for their children once their own loans are paid off.
Millennials are more likely than any other parents to fund a 529 savings plan, save money on a monthly basis, and to have increased the percentage of income that they save each month over the past year.