High Schoolers’ Saving for College Jumps Up in 2016, says College Savings Foundation Survey

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More young Americans are saving for college than in last 7 years - and more are working and planning on borrowing to fund college than in 2015, new survey says

We are encouraged to see high school students taking their futures seriously and committing to pursuing – and funding – higher education. -- Mary Morris, Chair, College Savings Foundation

60% of high school students across the country are saving for their higher education, up from 51% in 2015 and the highest level since 2010, according to the College Savings Foundation’s seventh annual How Youth Plan to Fund College survey of high school students across the country. Of those students saving, 20% say that the primary way of saving is utilizing a 529 college savings plan.

For an Executive Summary of the survey results with charts and graphs see http://www.collegesavingsfoundation.org/pdf/2016StudentSurveyExecSummary.pdf

High school students may be modeling good habits in the family: 62% say their parents are saving as well.

“American families are giving saving a big vote of confidence,” said Mary Morris, CSF Chair. “We are encouraged to see high school students taking their futures seriously and committing to pursuing – and funding – higher education.”

Almost all (89%) high school students surveyed plan to contribute toward all or at least a portion of their education costs – up from 75% one year ago and also at the highest level since the survey’s inception.

How High Schoolers Will Fund College:

More students are tapping into multiple resources to pay for college, including financial aid, loans, and scholarships, as well as working – right now and during college:

Financial aid: 56% are planning on receiving financial aid and 35% believe they may be eligible to receive some aid to attend college. Over 90% of respondents realize that financial aid awards often include student loans that will require repayment over time.

Student loans: 71% say they plan to or will possibly borrow money outside of financial aid – up from 55% last year. Of those students, three-quarters are concerned about paying back their loans; and 45% think they’ll be paying them back for 6-10 years.

Scholarships: 85% plan to or believe they may receive a scholarship.

Employment: 53% already have jobs to accumulate savings for higher education. Looking forward, 63% intend to work while attending college, 31% may work while in college, and of those, 82% envision working part time while at school.

Saving: Not only are more students saving, their saving discipline is having an impact: 78% of savers have accumulated more than $1,000.

High school students are also knowledgeable about saving strategies. In a new question asked this year, it is interesting to note that 37% of all students knew that saving in a 529 college savings plan could fund graduate education and lifetime learning.

How Parents and Families are Helping:

The lines of communication between parents and their children on the topic of college funding appear to be wide open. More students (86%) have talked with their parents this year about their involvement in funding college than in the past, up 14 points from 72% in 2015.

Of the 62% of parents who students report are saving, 29% are saving primarily through 529 college savings plans. In comparison to last year’s survey, parents are saving dramatically more: 68% have saved over $5,000; a full ten percentage points ahead of 58% in 2015.

Parents also seem to be using sound strategies to boost savings. 57% of students say their parents save a fixed amount per month, up from 52% last year; and nearly half (47%) said their parents started saving sometime between the student’s birth and through elementary school, showing a recognition of the positive impact long-term, methodical saving can have on meeting savings goals.

Extended family is also a growing source of support in college funding. 59% of the students expect to receive some money from relatives (grandparents, uncles/aunts) and 23% of students said they are aware that relatives save utilizing a 529 college savings plan.

A Spotlight on High School Savers:

An analysis of the 60% of students who are saving money for higher education reveals that parents who save have children who save. The students who are saving are also working and plan to work in college.

  • 94% of high school savers are talking to their parents about their involvement (more than the 89% of those surveyed).
  • Substantially more of their parents are saving (79% of high school savers versus 62% of all students surveyed).
  • More savers’ parents have accumulated more than $5,000 (75% versus 68% of all surveyed) and are more likely to save a fixed amount per month (66% versus 57%).
  • Year over year, substantially more high school savers are already working (74% compared to 53% of youths surveyed) and intend to continue to work while attending college (71% versus 63%).

The 2016 How Youth Plan to Fund College survey reached over 500 sophomores, juniors and seniors in high school across the country via Survey Monkey, with parental permission.

The College Savings Foundation (CSF) is a Washington, D.C.- based not-for-profit organization helping American families achieve their education savings goals. http://www.collegesavingsfoundation.org

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Lynthia Romney
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