More families are saving for college this year than in the previous three years, according to a new study by Sallie Mae and Ipsos. About 2,000 parents who have children under the age of 18 were surveyed about why - and how - they are saving for college.
Here are the highlights:
-57 percent of parents are saving for college this year, up from 48 percent last year.
-The average amount those families have saved is also up at $16,380. That's a four-year high and up from $10,040 last year.
-More Millennial and Baby Boomer parents are saving for college than Gen-X parents. They are also saving more money for all expenses than Gen-X parents.
Who's More Likely To Save?
Whose Saving The Most
While there's encouraging news parents are saving more for their children's education, the report highlights that parents are not taking advantage of 529 college savings plans that offer tax incentives. Instead, they're favoring lower-yielding savings and checking accounts to park their money.
Where Parents Are Keeping College Money?
-General savings accounts: 61%
-Checking accounts: 38%
-529 college savings plans: 37%
Even though fewer parents use 529 college plans, those that are using those plans have saved higher average amounts than those using other types of accounts. The average amount saved in a 529 plan is $7,534. That's compared with $6,043 in a general savings account.
Which Parents Are More Likely To Use 529 College Plans?
-Baby Boomer: 23%
And not only are American parents saving more for college, more than half of those surveyed say they are confident about making college happen.