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With the cost of a college education continually going up, many parents across the country are expecting their children to come up with more of the money they’ll need for their higher learning costs. But some of those parents haven’t told their children how much they are expecting them to contribute, according to a 2018 study from Fidelity Investments and the Massachusetts Educational Financing Authority (MEFA).
What the Study Shows
The study shows more parents are starting earlier when it comes to college savings for their children. The most recent study shows 66 percent of parents are starting to save before their child turns 5 years old, which is an increase from 62 percent in 2016.
But even with that number of years actively saving for college, Massachusetts parents in the study are expecting to only meet 37 percent of their savings goals. As low as that number is, it’s better than the national average of 28 percent. Plus, it’s an improvement from 2016 when the state’s parents were only expecting to reach 28 percent of how much they wanted to save for college costs.
Tom Graf, MEFA Executive Director, said in an article on Fidelity that Massachusetts parents have proved saving is a priority to them.
Expectations of Parents About College Costs
The study also found parents are counting on their children to pick up more of the tab for college expenses than they used to expect them to chip in.
Parents in Massachusetts expect to cover most of the cost at 66 percent, but those parents also want their children to save an average of $9,282 by the time they earn their high school diplomas.
Fewer parents feel like they should have to pay for the entire college bill – only 47 percent felt that way in the most recent study, while 60 percent felt that way the first year of the study in 2007. Nationwide, 49 percent of parents now feel they should have to pay all the college expenses for their child, which is slightly higher than the parents in Massachusetts.
While expecting children to contribute more money may not be unreasonable since the cost of college is increasing, parents aren’t doing the best job at communicating that information. Nearly half of the Massachusetts parents surveyed – 47 percent – said they haven’t talked to their children about their expectations of them kicking in money for their college education. That number is higher than it was in 2016, when 41 percent of parents had discussed financial contributions with their children.
Melissa Ridolfi, Vice President of Retirement and College Products at Fidelity, said in a statement that parents clearly need to work on their communication with their children about college. Parents and children also need to discuss whether they want to take out student loans – and how much, since that will affect their debt levels after they graduate. Calculating your college costs and other financial needs can help you determine what you need to borrow as well as help you figure out your borrowing limits so you keep your debt at a manageable level.
Author: Shannon Serpette
Shannon Serpette is a mother of two and an award-winning journalist and freelancer who lives in Illinois. When she’s not spending time with her children, she is often pursuing her favorite hobbies – running, metal detecting, kayaking, and reading about personal finance.