A growing number of parents—58%—believe their children should be taking some responsibility in paying for their college education.1 Has your family discussed expectations and plans surrounding paying for college?
Most parents consider minimizing college costs to be important to their families. And 85% of parents paid a portion of the cost of their child’s college education out of their own pocket.1 Parents saved an average of $28,679 for this purpose.2 In addition to the average parental savings, most expect the cost of college to be a burden shared between parents and student.
On average, parents’ income and savings contribute about 45% of tuition per year.1 The remainder is funded through a combination of student income, scholarships, grants, federal student aid, loans, and gifts from family. Even though many families are saving for college, 64% of families who borrow say that was always part of their plan.1
Relaying Expectations to Children
When it comes to paying for college, closing the parent-child communication gap is important. In order to make the overwhelming task more manageable, it’s best to create a plan and be transparent with your child about that plan so you can work together.
The first step, which should be ongoing throughout your child’s primary and high school education, is to consult your financial professional.
If you’re using a 529 plan, you’re already taking advantage of a tool that may enable you to save more than the average parent who is using a savings or checking account. Your financial professional can serve as a resource for maximizing the potential of your child’s 529 plan within your individual family and financial situation.
The second step is to discuss with your child who will pay for tuition and fees before they apply for college. Have you explained what a 529 is? Should they plan to apply for grants and scholarships? Have you explained the benefits of attending school in-state? Are they aware of how being a resident assistant could help make college more affordable?
Consider setting your child up with a solid foundation to finance his or her future with a 529 plan. Then help build on that foundation by having honest, open conversations.
On Target to Meet Your Goals?
Even if your goals are appropriate given your family’s circumstances, what about your savings rate? Do you think that you’ll achieve your goal? Talk with your financial professional, and check out the College Savings Planner calculator at hartfordfunds.com/529calculator. Simply plug in a few numbers to find out if you’re on track to save enough.