U.S. parents appear to have enough resources to meet only 16% of college costs, down from 18% in 2009.
Fidelity Investments, Boston, has based that estimate of family college funding status on results from a survey of 2,500 U.S. financial decisionmakers who have children ages 18 and younger who are expected to attend college and who have annual household incomes of at least $30,000 per year or more.
Fidelity puts data on the number of children in each household, each child’s time to matriculation, the current savings rate, future contribution expectations and other data through Monte Carlo simulations to predict what percentage of college costs families might be able to handle.
The current family college funding level is down from 24%, when Fidelity first began tracking the statistic.
But Fidelity found that 67% of parents included in the survey are saving for future college costs, up from 63% in 2009 and up from 58% in 2007.
The percentage of participants who said they are familiar with Section 529 college savings plans has increased to 51%, up from 40% in 2009.
The percentage of parents who plan to start saving for college in the future and want to open a 529 plan has increased to
30%, from 18%.
Parents of children ages 5 and younger are more likely to say they have dedicated college savings accounts than parents of children in high school.
The median level of college savings is $8,000 for the parents of the youngest children, $10,000 for the parents of children in elementary school, and $17,000 for the parents of children in high school.
About 30% of the parents who plan to send children to college said either they or a member of their family who contributes to household expenses had lost a job within the past 18 months. About 81% of the parents affected by job loss said unemployment had reduced their ability to save for college.
About 32% of the parents said they had drawn from their child’s college savings account to meet other financial needs.
The percentage of parents who reported seeking help from financial advisors increased to 33%, from 28%, and the advisors consulted are providing more services, such as help with researching schools and securing financial aid.