Alan Cleaver
Individuals, couples and even businesses have watched as their investments have plummeted during this recession. The College Savings Indicator study conducted by Fidelity Investments revealed that parents of high school age children have seen their college savings plummet by almost 27% as well. In 2008, parents reported they could pay for approximately 15% of their child’s college costs, while in 2009 parents are only able to cover about 11%.
The good news is that more parents are saving for college than ever before and the amount of parents saving seems to be growing. Last year approximately 60% of parents surveyed had saved for their child’s college education. In 2009, 63% of parents surveyed have a college savings account of some sort. This group of parents can cover approximately 18% of their child’s college expenses, while parents that invested in 529 plans can cover 36% of the total college costs.
Covering the Shortfall
With lending restrictions tightened because of the recession, the parents that cannot cover their child’s college expenses are concerned about how they’re going to cover the shortfall. Almost half of the parents surveyed, 43% believe that they will not be able to get student loans to cover the remaining costs of college. Instead, these parents are looking for ways to earn more income and cut back on current expenses so they can channel these savings into college savings.
It’s also affecting college patterns for the kids. Instead of heading off to college and living on campus, 50% of the parents report that their child will remain living at home and commute to class each day. Forty-three percent of parents also have plans to delay their retirement so that they can make sure they have enough money to pay for college expenses for their kids. Some parents are even channeling what was once retirement savings money into college savings money.
The kids are stepping up to the plate of responsibility too with 90% of high school graduates saying they will help pay for some college costs using a combination of money from their parents, the student’s own savings account and by working while attending school.
Related posts:
- The Easiest Way To Earn Savings For College.
- 5 Things To Know About Saving For College With a 529 Plan.
- Beyond Federal Financial Aid
- Don’t Overlook the Fastest Route to College Financial Aid
- College Tuition and Financial Aid Explained at the University of Michigan
Tags: college savings, college savings in the recession, how the recession has changed college, Paying for College
