COLLEGE SAVINGS FOUNDATION • 2015 EXECUTIVE SUMMARY
PARENTS SAVE FOR KIDS’ COLLEGE DESPITE
CARRYING STUDENT DEBT
“529s,” as they are called, are
intended to support families in
meeting the relentlessly rising
expenses of a college education.
The average annual tuition costs
of attending a 4-year public and a
4-year private college or university
in 2014-2015 continued to rise
beyond the rate of inflation.
Including tuition, room, board and
expenses, the average total cost
for an in-state student at a 4-year
public college is $18,943, and for
a 4-year private college is $42,419,
according to the College Board.
College Savings Foundation’s 9th Annual Survey: Parents Motivated to Save
One-third of parents are still shouldering student debt but are determined to change that
for their children and are choosing savings to finance their college. The majority, 51%, of
parents responding to the 9th Annual College Savings Foundation State of College Savings
Survey said savings is their number one strategy for funding their children’s college costs, up
from 45% last year, and ahead of loans; grants, scholarships or aid; and current income.
Overall, there was an upswing in parental saving: 53% of all parents are saving; and
nearly half, 48%, have saved at least $5,000 per child. Parents used these tools to help
them along:
•
33% of parents own a 529 college savings plan.
•
42% use automated monthly savings plans, up from 38% last year; and 67% save
more than $100 a month in them.
•
51% would ask family or friends for college savings instead of a material gift.
“We are encouraged to see parents across generations avidly saving for their children’s
college and that their own student debt is a motivator – not a deterrent – to saving,”
said Mary Morris, Chair of the College Savings Foundation, a leader in helping American
families save for their children’s college education. In the survey, 82% of parents with
college debt said it had made them consider other strategies for their children.
A breakdown of the three major age brackets of parents revealed a strong savings bent
among younger parents who are using savings tools like 529s and automatic savings
programs to help them:
The 2015-2016 State of College
Savings Survey was conducted
by the College Savings Foundation
using an online Survey Monkey
survey of over 800 parents of
children 18 or under, from across
the country, age and income
categories.
The College Savings Foundation
(CSF) is a Washington, D.C.based not-for-profit organization
whose mission is to help
American families achieve
their education savings goals,
by working with public policy
makers, media representatives
and financial services industry
executives in support of
education savings programs.
www.collegesavingsfoundation.org
Parents age 31 -35:
•
40% have student debt; and 91% said it made them consider other strategies for
their children.
•
54% are already saving. 55% said that saving is their primary way to pay for college.
•
31% own a 529 college savings plan.
•
43% have saved more than $5,000 per child.
•
50% have automatic savings plans; and of that, 38% save between $101-300 per month.
Parents age 36-45:
•
29% are paying off debt. 76% said it has made them consider different strategies.
•
54% are saving. 48% say savings is the primary way to pay for college.
•
37% are using a 529 college savings plan.
•
50% have saved more than $5,000 per child.
•
41% have automatic savings; of which 33% save between $101-$300 per month.
Parents age 46-55:
•
24% are still paying off student loan debt; 74% said it would make them consider
other strategies.
•
56% are saving; 45% say primary way to save is through savings.
•
32% use 529s.
•
61% have saved more than $5,000 per child.
•
39% have automatic savings accounts. 33% save between $100-300 per month – but
another 45% are saving more than that.
This doesn’t mean the kids get a free ride: 74% of parents expect their children to contribute
to college costs, and nearly half of parents, 49%, say their children will get a job to help pay
for college.
Other sources of college funding include financial aid, where 69% of parents expect their
children to receive it, mostly in the form of grants and scholarships. They also expect to take
out loans. 61% expect to borrow including 40% who said that education loans – taken by
student and/or parents – were their top borrowing choice. 69% of parents expect that it will
take them or their children a minimum five years to pay off the loans after graduation.
The College Savings Foundation’s 2015-2016 State of College Savings Survey was conducted
by Survey Monkey of over 800 parents across the country and income levels.
2
C O L L E G E S AV I N G S F O U N D AT I O N
“We are
encouraged to
see parents across
generations avidly
saving for their
children’s college
and that their
own student debt
is a motivator –
not a deterrent
– to saving,” said
Mary Morris,
Chair of the
College Savings
Foundation
PARENTS SAVE TO HELP CHILDREN AVOID DEBT
One-third of all parents are still shouldering student debt
Q.
Are you currently paying off student loan debt?
Yes
32%
68%
No
Debt leads the vast majority – 82% – to consider other options
Q.
Has your college debt made you consider other strategies for your children?
Yes
82%
18%
No
53% of parents are saving for their children‘s college
Q.
Do you plan to help fund your child/children’s college education? (Select One)
2015
Yes, I am saving
53%
Yes, I plan to save, but have not started yet (19%)
Yes, I anticipate taking out loans (3%)
19 %
Yes, I am/plan to save and anticipate taking out loans (7%)
Yes, but I do not know how I am going to pay (7%)
No, I expect they will get scholarships (3%)
No, I expect the government to help me (1%)
No, I feel it is their responsibility (1%)
No, I cannot afford it (6%)
19%
2014
Yes, I am saving
50%
Yes, I plan to save, but have not started yet (19%)
Yes, I anticipate taking out loans (4%)
Yes, I am/plan to save and anticipate taking out loans (8%)
Yes, but I do not know how I am going to pay (7%)
No, I expect they will get scholarships (4%)
No, I expect the government to help me (1%)
No, I feel it is their responsibility (2%)
No, I cannot afford it (5%)
Savings is the Number One way for parents to pay for college: 51% up from 45% last year
Q.
What is the primary way that you plan to pay for your child’s college costs?
Other
Current Income
8%
Grants/
Scholarships/
Direct
4%
24%
7% 3%
51%
13%
Other
Current Income
Savings
Grants/
Scholarships/
Direct
30%
45%
Savings
15%
Loans/Borrowing
Loans/Borrowing
2015
2014
2 0 15 S U R V E Y
OF
PARENTS
3
Nearly half have saved more than $5,000 per child
Q.
How much have you saved for your children’s college education (per child)?
46% saved > $5,000
48% saved > $5,000
$50,001 - $100,000
$25,001 - $50,000
8%
$10,001 $25,000
>$100,000
4% 4%
Nothing
28%
15%
17%
$25,001 - $50,000
$10,001 $25,000
24%
$5,001 - $10,000
<$5,000
>$100,000
$50,001 - $100,000
5% 5%
10%
Nothing
29%
12%
25%
14%
<$5,000
$5,001 - $10,000
2015
2014
Nearly one-third use 529 college savings plans
Q.
Do you know what a 529 college savings plan is?
Yes, I own one
Yes, I own one
Yes, but I don’t know
much about them
33%
Yes, but I don’t know
much about them
32%
26%
33%
No, I have never
heard of them
28%
32%
8%
Yes, I plan to start one
2015
No, I have never
heard of them
8%
Yes, I plan to start one
2014
42% use automatic savings plans
Q.
Do you currently have an automatic monthly savings plan set up for college savings?
Yes
42%
58%
No
Yes
38%
2015
62%
No
2014
35% are saving between $101-$300 per month
Q.
How much do you save monthly?
$51 - $100
$51 - $100
26%
Under $50
Under $50
7%
Greater
than $500
15%
35%
17%
$301 - $500
2015
4
C O L L E G E S AV I N G S F O U N D AT I O N
$101 - $300
Greater
than $500
9%
23%
34%
15%
19%
$301 - $500
2014
$101 - $300
BREAKDOWN BY GENERATIONS
Parents have student debt – at all ages
Q.
Are you currently paying off student loan debt?
Yes
40%
No
60%
Yes
71%
29%
Ages 31 - 35
Q.
24%
Yes
Ages 36 - 45
76%
No
Ages 46 - 55
Has your college debt made you consider other strategies for your children?
Yes
9%
91%
No
Yes
76%
Ages 31 - 35
24%
NoNo
Yes
26%
74%
Ages 36 - 45
No
Ages 46 - 55
Do you plan to help fund your child/children’s college education? (Select One)
60
54 54
PERCENT
Q.
No
50
50
40
40
30
30
24
20
KEY
20
15
12
Ages 31-36
Ages 36-46
60
56
10
10
7
4
4
4
9
9
6
4
6
3 3
Ages 46-56
2
0
1
2
0
2
8
10
3
0
0
0
Yes, I am
saving
Yes, I plan
to save, but
have not
yet started
Yes,
I anticipate
taking out
loans
Yes, I am/
plan to
save and
anticipate
taking out
loans
Yes, but
I do not
know how
I am going
to pay
No, I expect
they will get
scholarships
No, I
expect
the
government
to help me
No, I feel
it is their
responsibility
2 0 15 S U R V E Y
OF
No, I cannot
afford it
PARENTS
5
Q.
How much have you saved for your children’s college education (per child)?
30
29
29
26
30
25
25
25
21
21
19
PERCENT
20
20
18
16
16
15
15
15
11
10
10
KEY
10
9
10
8
Ages 31-36
6
5
4
5
Ages 36-46
4
5
2
Ages 46-56
0
0
Nothing
Q.
<$5,000
$5,001 $10,000
$10,001 $25,000
$25,001 $50,000
$50,001 $100,000
>$100,000
If you are saving for college, what vehicles are you using? (Check all that apply)
40
40
37
35
31
30
31
31
35
32
29
30
27
26
23
PERCENT
25
20
30
27
25
19
20
16
15
15
KEY
10 10
Ages 31-36
Ages 36-46
8
10
9
10
4
5
5
5
6
4
5
6
5
Ages 46-56
0
0
Mutual funds/
CDs or bank
stocks/bonds - savings accounts outside of a
outside of a
529 plan
529 plan
6
C O L L E G E S AV I N G S F O U N D AT I O N
529 college
savings plan
Retirement
account
Life
insurance
Coverdell
Education
Savings
Account
N/A
Other
Q.
What is the primary way that you plan to pay for your child’s college costs?
60
60
55
48
50
50
45
PERCENT
40
40
30
30
26
25
22
20
KEY
20
14
13
14
Ages 31-36
9
10
Ages 36-46
10
6
3
5
6
10
Ages 46-56
0
0
Savings
Q.
Loans/Borrowing
Current Income
Other
Do you currently have an automatic monthly savings plan set up for college savings?
Yes
50%
50%
No
Yes
41%
Ages 31 - 35
Q.
Grants/Scholarships/
Direct Aid
59%
No
Yes
39%
61%
Ages 36 - 45
No
Ages 46 - 55
How much do you save monthly?
Greater than $500
Under $50
12%
$301 - $500
12%
14%
Under $50
Greater than $500
16%
24%
$51 - $100
$301 - $500
38%
6%
25%
$51 - $100
20%
33%
$101 - $300
$101 - $300
Ages 31 - 35
Ages 36 - 45
Under $50 (2%)
Greater than $500
$301 - $500
$51 - $100
23%
20%
22%
33%
$101 - $300
Ages 46 - 55
2 0 15 S U R V E Y
OF
PARENTS
7
OTHER WAYS PARENTS ARE FUNDING COLLEGE
40% of parents are borrowing and using Education Loans
Q.
If you are borrowing, what do you anticipate will be your number one college financing source? (Check one)
Second mortgage or Home Equity Loan
7%
Education
Loans
2015
7%
Credit Card or Credit Line
Borrowing against my retirement (4%)
Borrowing against other investments (3%)
40%
38%
Other (1%)
2014
N/A
7%
Education
Loans
40%
Second mortgage or Home Equity Loan
Credit Card or Credit Line
6%
Borrowing against my retirement (3%)
Borrowing against other investments (2%)
41%
Other (1%)
N/A
69% of parents expect loan burdens for at least 5 years
Q.
The average Public College student graduates with over $26,000 in loans (and much more for Private College). How long do you anticipate it will take you or your child after graduation to pay off the average college
tuition and costs funded through loans?
5-10 years
5-10 years
0-5 years
0-5 years
38%
16%
15%
7%
N/A
36%
16%
24%
N/A
15%
25%
8%
10-20 years
10-20 years
>20 years
>20 years
2015
2014
Parents expect children to kick in for college costs
Q.
Will your child contribute to paying for college?
Yes, up to
one-third
Yes, up to
one-third
45%
49%
26%
16%
9%
Yes, between
one-third and
two-thirds
Yes, over
two-thirds
2015
8
C O L L E G E S AV I N G S F O U N D AT I O N
No
26%
19%
Yes, between
one-third and
two-thirds
10%
Yes, over
two-thirds
2014
No
How? Parents say “Get a job!”
Q.
How will they contribute to college costs?
Own Savings
Own Savings
Loans
14%
12%
10%
10%
Job
49%
Job
Scholarships/
Grants/Fellowships
24%
49%
Loans
Scholarships/
Grants/Fellowships
25%
Military Funding (1%)
Other (2%)
Military Funding (1%)
Other (2%)
2015
2014
69% of parents expect finanical aid for their children
Q.
How much financial aid do you anticipate receiving?
Up to one-third of
college costs
37%
None
39%
None
31%
29%
21%
22%
11%
10%
Between one-third and
two-thirds of college costs
Between one-third and
two-thirds of college costs
Over two-thirds
of college costs
Over two-thirds
of college costs
2015
Q.
Up to one-third of
college costs
2014
What form do you expect the financial aid to take?
80%
Grants/Scholarships
82%
46%
Loan Package
47%
2015
2014
29%
Work Study
34%
1%
Other
0%
1%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2 0 15 S U R V E Y
100%
OF
PARENTS
9
Over half would ask friends and family for funds
Q.
Would you ask friends/family to make a college savings gift instead of material gifts?
No
No
28%
Yes
27%
51%
Yes
54%
21%
19%
I don’t know
2015
I don’t know
2014
College Savings Foundation • 2111 Wilson Blvd., Suite 700 • Arlington, VA 22201 • 703-351-5091