Fifty-seven percent of parents are saving for their children’s education compared to the 48 percent last year, according to the latest How Americans Save for College report from Sallie Mae and Ipsos. The average college saving balance has climbed to $16,380 compared to the $10,040 average last year.
Millennials, who are deemed of the age 35 and younger, show a higher average of college savings compared to other generations. Sixty-six percent of millennials have a goal for their college savings, compared to the 47 percent of Generation X parents and 35 percent of the Baby Boomer generation.
The Millennial generation is saving more in general in comparison to other generations, according to Forbes. Millennials have an average total balance of $20,155, compared to the $12,428 of Generation X parents and $18,323 for Baby Boomers.
“When it comes to saving for college, Millennials are putting their money where their mouth is,” says Rick Castellano, a spokesperson for Sallie Mae. “They not only see the value of college, but they’re going a step further and they’re saving more.”
This surge of savings may come from the strong economic recovery from the recent recession.
If you look at unemployment among Millennials in particular, we see pretty notable and dramatic recovery,” said Julie Clark, senior vice president at Ipsos. “So that optimism and confidence about the future is really being reflected through that lens.”
Millennials are more likely to believe that the cost of college should be paid for by the parents.
“That’s something we don’t see as much with Gen Xers or Baby Boomers, and that lends itself to Millennials being more prepared and saving more,” Clark said.
Saving for college is a very involved process, with a variety ways of doing so.
“You almost feel like it’s intuitive to have a plan,” Castellano said. “But it’s doing the research, setting up a dedicated savings account. And they’re actually taking steps to do that, so it’s very encouraging to see.”
