Fidelity: Parents are cutting back on college savings
Parents are projected to meet only 21 percent of the total cost of their children’s college education, a three percentage point decrease from last year, Fidelity Investments said.
The Boston mutual funds giant today announced the results of its second annual College Savings Indicator, or CSI, which Fidelity says is aimed to calculate how prepared parents are to pay for future college expenses, currently estimated at $120,000 for today’s high school seniors.
Fidelity sells a range of investment products, including products that help parents save for their children's college education.
Fidelity said in a press release: "According to parents surveyed, the current economic conditions are having a direct impact on their ability to save more for college, with 60 percent citing day-to-day expenses as a barrier. As a result, over one–third (34 percent) of these parents have either decreased the amount they are saving or have stopped saving completely for their children’s future college education. In addition, 35 percent of all parents fear they will need to delay retirement to meet college expenses."
Fidelity's press release included a statement from Joe Ciccariello, vice president of college planning, Fidelity Personal and Workplace Investing.
“With college costs rising at twice the rate of inflation, it’s critical for families to set a college savings goal early and invest regularly in a tax–advantaged account, such as a 529 plan, to meet expenses,” Ciccariello said in the statement. “In fact, this year’s indicator found that parents who are investing in a 529 are on track to cover 40 percent of their children’s college education expenses, double the preparedness level of parents nationwide.”
(By Chris Reidy, Globe staff)
