BOSTON – A new study shows that parents are saving for future college costs at an all-time high, but there remains a gap when it comes to understanding the true cost of higher education.
Fidelity Investments this month released its College Savings IQ survey, showing 72 percent of parents have started to save for college. Fifty-nine percent of those saving regularly report contributing a median of $220 per month.
The report lauds the high rates of saving, but warns about an ongoing misconception about how much college will cost.
“While college savers appreciate higher education as an investment in the future, many parents may be dramatically underestimating the sticker price associated with earning a degree based on current average costs and rates of college inflation,” according to the report.
Parents of high school students surveyed missed the average projected sticker price for a four-year college by an average of $70,000. For parents of preschool kids and younger, the missed estimation jumped to an average of $110,000, according to results.
“Pinpointing how much you should save can feel like a moving target – especially when your kids are young and college goals for your child’s education may be more undefined,” said Keith Bernhardt, vice president of college planning at Fidelity.
The full survey goes on to detail additional knowledge gaps when it comes to 529 college savings plans, which are investment vehicles to save for future education costs.
Eli Sherman is a PBN staff writer. Email him at Sherman@PBN.com, or follow him on Twitter @Eli_Sherman.
