Students saving more, parents saving less for college

As the cost of college has risen, the burden of paying for it has fallen on students more than ever.

CNBC reports that college students are saving an average of $7,801, according to the second edition of the Allianz Tuition Insurance College Confidence Index.

Student savings continue to increase

That’s up 17% from $6,678 in 2017.

Meanwhile, the amount parents are saving for their children’s college has decreased since last year, although it’s still more than students are saving. Parents saved $12,938 for college in 2018, down 12% from $14,690 in 2017.

This trend is expected to continue as college costs increase each year, according to Daniel Durazo, director of marketing and communications at Allianz Global Assistance.

Durazo forecasts that in 2019, students will save an average of about $9,127 toward college costs. Meanwhile, parents’ savings could decline to about $11,385 in 2019.

4 in 10 families still aren’t saving

While it’s great that prospective students are more prepared financially for college, it’s important to keep in mind that four in ten students and parents have saved nothing for college, according to the report.

Given that the average cost of college is now $20,770 for in-state students at public universities and $46,950 at private universities, saving for college is more important than ever.

Parents should consider 529 plans to save money tax free for college. High school students can try to save money by working a summer job — although they should be careful where they save that money to avoid being penalized for financial aid.

We help families figure out the best way to pay for college and find ways to reduce their costs through financial aid. If you’d like to learn how we can help you, call us at 1-888-234-3907 or send us a message.