For most parents, the idea of saving enough money for their kid to go to their dream college can feel like a nightmare but a new report shows that things may not be as grim as parents may believe it to be.
The latest “How America Saves for College” report from Sallie Mae has found that parents are more likely to meet their college saving goals, as approximately 90 percent of parents who have a college savings goal feels confident that they will meet it. This is partially due to more realistic expectations being set by mom and dad, as parents reportedly reduced the amount they plan to save from $61,902 to $55,342 over the last year.
But the measured expectations may be resulting in an increase in actual savings, as the report indicates that net savings are up. And, according to Reuters, the average amount that has been saved for college is $18,135, compared to $16,380 in 2016.
There are a variety of reasons why parents might be saving more successfully than before but Mark Kantrowitz of Private Student Loans Guru told Reuters that he believes that 529 college savings plans can play a massive role in increasing college savings. According to Sallie Mae, the amount saved on average in a 529 account has almost doubled over the past year, jumping from $2,820 to $5,441. Kantrowitz says a 529 plan is effective because it makes it clear how much is being saved.
“We are heading in the right direction, but there is still more to do,” Kantrowitz explained to Reuters. “Everyone can save a little, even $25.”
Despite the good news, saving money for college remains a massive source of stress for parents, as CNBC reported that the price of an average college tuition has increased a staggering 213 percent over the last 30 years.