Many boomer parents are starting to see their kids graduate from high school, only to realize they haven’t socked away enough money for college.

This year alone, over 3 million students graduated from high school, while their parents expect on average to have just 13% of the estimated $100,000 needed to fund 4 years of college, according to a survey by Fidelity Investments, Boston.

Fidelity found parents of this year’s high school graduating class foresee that student loans will cover an average of just 17% of their child’s total college expenses.

This finding comes at a point in time when, many experts observe, loans are becoming more difficult to secure, with higher interest rates and less favorable terms than in previous years.

To cover 17% of college costs through loans, today’s high school graduates would ultimately incur $25,000 in future debt, Fidelity estimates.

“As college tuitions continue to rise year after year, financial aid and loans can be part of the overall savings strategy, but it should not be a substitute for starting to save early and often in a tax-advantaged account like a 529 plan,” said Joe Ciccariello, vice president of college planning for Fidelity’s personal & workplace investing division.

“In fact, our research shows that parents of children ages 15 to 18 who currently utilize a 529 plan have significantly more savings–and are on track to cover almost half of college expenses.”

Despite the increased college savings preparation of those parents using a 529 plan, 60% still struggle to understand how savings in a dedicated college savings account are factored into the financial aid formula.

Actually, investing in a 529 plan account has a relatively small impact on financial aid, because assets in a 529 plan are considered those of the parent, not the child, Fidelity says. Savings accounts held in the name of the child have a greater effect on aid eligibility because they are considered to be assets of the child in calculating financial assistance.

Another survey by Country Financial, Bloomington, Ill., found 81% of Americans say they should start putting money away for college before their kids are born or before they get to elementary school. The figure was slightly lower in a prime boomer age group–those aged 50 to 64–roughly 75% of whom thought it was important to start that early.

Just 24% in that age group said they use Coverdell savings accounts, 529 plans or tax-free gift programs to help save for their children’s college education. That ratio was about the same for most age groups surveyed, Country reports.

Despite the rising cost of college, 79% of those in the 50-to-64 age group and 81% of all respondents say they still think it’s a good investment, the survey shows.

Yet 47% of all those surveyed now say saving for their retirement is more important than saving for their child’s education. This is up from 43% percent in 2007, when Americans were equally split on their retirement vs. college priorities.

Understandably, boomers were more likely to give higher priority to retirement savings. For parents aged 50 to 64, 53% rated retirement as more important, compared to 36% who cited college as more important. (The remainder had no opinion.)

Among all respondents, 75% said tuition costs would limit their choice of where to send their kids to school, about the same as those in the prime boomer age group.

Another report by Putnam Investments L.L.C. concludes that saving for retirement is a major reason so many struggle to pay for college. Balancing saving for retirement and college is more challenging today than it was a generation ago, the report notes.

Perhaps the most significant change over the past 20 years or so is that more people are now responsible for funding their own retirement, notes Putnam, Boston.

In 1985, 60% of retirement assets were represented by defined-benefit plans, in which an employer put aside money on behalf of its workers to provide a guaranteed source of retirement income. Because these programs eased much of the financial need to save for retirement, they freed up funds for college.

Today, nearly two-thirds of all retirement assets are funded by individual rather than employer contributions, Putnam points out.

The Putnam paper, “College or retirement? How to balance two of life’s biggest savings goals,” found a second reason why balancing these 2 goals are more difficult today: Couples are having children later in life. Citing data from the National Center for Health Statistics, Putnam notes the birth rate for mothers aged 30 to 34 has risen 83% since 1975. In fact, many women over age 35 and even over age 40 are choosing to have babies for the first time. So parents often find themselves confronting the dual savings challenges of retirement and college at the same time.

Meanwhile, the decline in home prices since 2006 leaves parents with less equity to borrow against to pay for college, Putnam observes.

Elaine Sullivan, Putnam’s head of retail marketing, says advisors should encourage parents to use a balanced savings approach, combining 529 college savings plans and savings bonds for college costs with the use of tax-advantaged savings plans such as 401(k)s and IRAs for retirement.

“We must assume the responsibility of both saving for retirement and college,” Sullivan says. “This new reality requires a new way of thinking about the competing needs we face, including a realistic assessment of our goals and a more creative and resourceful way to address saving.”

Jeff Troutman, vice president of college savings for Fidelity, acknowledges that of the 2 goals, retirement has to be the top priority for the boomer client.

“That being said, there are a number of ways to save for college as well: Start as early as possible with small amounts,” Troutman says. “Then, save on an opportunistic basis when possible, such as by putting aside bonuses. Also, look at family members like grandparents and at how they give gifts to the children–instead, ask them to give money for college,”

Unlike with retirement, when the client has no other alternatives than their own savings, for college there are options, Troutman notes, such as financial aid and loans and by making hard decisions like going to community college for a couple of years or delaying college for a while.

“There are more options for saving for college and way more downsides to not having enough assets for retirement,” he says.