Credit: College Savings Image via Shutterstock
Families are not doing their homework when it comes to saving for college. New research has found that only 50 percent of families with children under the age of 18 are saving for college, down from 60 percent just two years ago.
Furthermore, just one in three parents has a plan to save for college, despite the fact that nearly all parents believe that college is an important investment in their children's future.
"We are concerned that many families are putting off financial preparations for college," said Jack Remondi, president and COO of Sallie Mae, which conducted the research. "Saving even small amounts can add up over time, and every bit helps."
The lack of savings, however, is not coming as a result of not trying. Rather, parents say they are overwhelmed, frustrated, annoyed and scared about saving for college. In fact, 47 percent of respondents who were not saving for college say it was for a reason other than a lack of money.
Respondents say they had a variety of reasons for not saving, including the fact that they thought their children would be awarded enough aid to cover college and that they thought their children should be responsible for paying for school. Other parents say they are unsure about how to go about saving and others say they are procrastinating.
Though the number of people saving has been declining in the past few years, respondents say that saving is most often prompted by a major milestone such as the birth of a child, the start of school, or learning about the costs of college from friends and family.
"Households from all income groups are more likely to save successfully with a plan," said Nancy Register, director of America Saves, a social marketing campaign that encourages individuals and families to save money and build personal wealth.
The research was based on the responses of 1,621 parents with children under the age of 18. The research was conducted by Sallie Mae and market research company Ipsos.