Millennials choosing to save for kids’ college tuition

Many millennials who’ve attended college know and understand the struggle of being left with a mountain of debt after college.

Seventy-four percent of parents aged 30 to 34 polled for the 2015 Fidelity Investments College Savings Indicator have put aside money for college, compared to 58 percent of parents the same age who were polled in 2007.

As college costs continue to grow, more families are making it a priority to save for higher education.

The children of millennials may be better prepared financially for college than the kids of Generation X parents will, a new study suggests.

Millennial parents, those born between 1981 and 1997, are even more determined to shoulder their children’s college costs, with Millennials hoping to take on 74% of these costs-more than older generations. In addition, 46% said they meant to pay their children’s full tuition bill.

Helped by the enthusiasm of millennial parents, the percentage of families saving for college is at an all-time high, according to Fidelity, with 69 percent of families surveyed reporting that they have started saving for college.

Among all parents surveyed, 62% were saving strategically by developing financial plans, up from 59% in last year’s study, and 39% were using tax-advantaged 529 college savings plans, up from 32% in 2014.

On average, millennials say they’ve only saved 28 percent toward their funding goals. Those surveyed were far more likely to have a college degree, for one thing.

“Millennials have weathered challenging economic conditions for much of their adulthood”, Bernhardt said. Survey respondents had household incomes of $30,000 a year or more, and were the financial decision makers in their household.

The retirement specialist advisory industry is still coming to terms with the opportunities and challenges of servicing 529 college savings plans.

One thing parents are still getting wrong, though, is being afraid that saving for college will hurt their kids’ ability to get financial aid. “If you save $10,000, you’ll lose just $600 in financial aid”, Bernhardt said.