More families are saving for college in 2016 than in the prior three years of How America Saves for College. Fifty-seven percent of parents reported saving—up 9 percentage points from 2015. The average amount parents have saved for college is also up, at $16,380.
Millennial and Baby Boomer parents report saving for college at a higher rate than Gen X parents—and they save more than Gen X parents.
More of America’s college savings are held in general savings accounts than in any other type of account.
General savings accounts
Checking accounts
529 college savings plans
Parents who use 529 plans or investment accounts to save for college have saved higher average amounts than those using other types of accounts. The average amount saved in a 529 plan is $7,534; in an investment account, it’s $7,448. Those saving in a general savings account have saved an average of $6,043. Certificate of Deposit users average the next highest amount saved, $5,004.
Millennial parents are more likely to use 529 plans (44%) than Gen X or Baby Boomer parents (36% and 23%, respectively).
More than half of parents surveyed say they have a plan to pay for college. Fifty-six percent of Millennial parents have a plan, compared to 47 percent of Gen X parents and 54 percent of Baby Boomer parents.
Eighty-eight percent of those who have set a college savings goal are confident they’ll achieve it, an increase from 82 percent the prior year. Millennial parents are the most likely to set goals (66%), compared to Gen Xers (47%) and Baby Boomers (35%).
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For the purposes of this study, the Millennial generation is defined as ages 35 or younger; Gen Xers as ages 36-51; and Baby Boomer as ages 52-70.
Before investing in any 529 plan, please consider whether your or the designated beneficiary's home state offers its taxpayers benefits that are only available through that state's 529 plan.
How America Saves for College 2016, by Sallie Mae, the nation's saving, planning, and paying for college company, and Ipsos, the world's third-largest market research company, reports the results of 1,959 online interviews with parents of children under age 18 conducted May 26 − June 6, 2016.