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Millennial Parents Setting Ambitious College Savings Goals, Determined to Lessen Student Debt for Their Own Children

9th Annual Fidelity® Study Finds Saving for College at an All-Time High, Yet Parents are on Track to Reach Less Than One-Third (27%) of Their College Savings Goals

BOSTON – Fidelity Investments® today announced findings from its 9th annual College Savings Indicator Study, showing an encouraging increase in college savings and planning practices among families nationwide. According to the study results, saving for college has reached an all-time high with 69 percent of families currently saving (up from 64 percent in 2014). More parents are saving strategically by developing financial plans to help reach their college goals (62 percent, up from 59 percent last year) and utilizing tax-advantaged 529 savings accounts (39 percent, up from 32 percent in 2014).

Parents also intend to shoulder a larger portion of the anticipated college costs for their children—66 percent, continuing an upward trend from 57 percent in 2012. However, while parents may have good intentions, they still have some work to do on the savings front, as American families are currently on track to save just 27 percent of their college funding goals by the time their child is ready to head to campus.

Millennials Raising the Bar

Millennial parents (born between 1981 and 1997) appear particularly determined to help their children avoid significant student loan debt, adopting smart savings habits at a higher rate than their older counterparts to accomplish this goal. This is an encouraging trend, as this generation plans to cover nearly three quarters (74 percent) of their children's college costs, an even greater portion than older generations. Furthermore, nearly half (46 percent) intend to bankroll their children's full college bill.

Why are Millennials' college savings goals so ambitious? One likely influence may be that among Millennial parents who graduated with student debt, 56 percent are still paying back those loans. More than any other generation, Millennials have experienced first-hand the balancing act of paying off student loans while striving to become financially independent, which has likely propelled many of them, as parents, to take action. Among the steps they are taking to help ensure their children will enter adulthood on better financial footing:

  • Seven in 10 (71 percent) Millennial parents are actively saving for college for their children.
  • More than two-thirds (68 percent) have a plan in place to help them save for this goal and stay on track.
  • Of all age demographics, Millennials are the most likely to: save in a 529 college savings account (43 percent), save monthly (79 percent), and have increased the percentage they save each month over the past year (58 percent).
  • In addition, 91 percent of parents who are still paying back student debt plan to re-allocate those dollars toward their children's college fund as soon as they are finished paying off their loans.

"Millennials have weathered challenging economic conditions for much of their adulthood. Many have channeled that experience into setting college savings goals early, and taking steps to make savings a regular habit," said Keith Bernhardt, vice president of retirement and college products at Fidelity. "It is critical that parents of all ages establish college savings goals that are practical for their family's individual circumstances, and get the guidance they need to ensure they have an effective savings strategy to help them achieve those goals."

Parents Then vs. Now – Increased Awareness, Emphasis on Savings

Looking back to Fidelity's first College Savings Indicator Study in 2007, the research shows significant strides made in parents' savings efforts. Specifically, parents age 30-34 (older Millennials today, vs. parents of the same age in 2007) showcase this progress:

While many parents are showing greater awareness and are putting an emphasis on establishing smart savings habits, more than half (55 percent) of Millennials still feel they are off-target in their college savings efforts, an indication additional guidance and education is needed.

Many Millennials Seeking Out Financial Advisors to Help with College Guidance

Younger parents today are seeking out financial professionals for advice at a significantly higher rate than their counterparts of the same age in 2007. When looking at all Millennial parents, more than one-third (35 percent) have established a relationship with an advisor in an effort to obtain guidance for their college planning. Of these parents, more than three-quarters (78 percent) say working with an advisor has helped them get closer to their goal.

Millennial parents are also more willing than older counterparts to have conversations with their children about college costs. Advisors can play an important role as intermediaries, setting expectations of the debt parents and children may accrue, as well as helping to determine whether it is realistic for parents to bear the burden of paying for all of their children's college costs.

"Millennials are optimistic and proactive about covering the cost of their children's college education, and advisors can provide them with the tools and expertise to reach their goals," said Matt Golden, vice president of college savings for Fidelity Financial Advisor Solutions. "Among some younger parents, there are misconceptions about topics such as eligibility for financial aid, whether financial aid needs to be paid back, and when to start saving. Advisors are uniquely positioned to debunk these myths and recommend strategies for effective college savings."

Resources for Families: New "College Savings Quick Check" Calculates How Much to Save Monthly

Parents of all ages recognize the challenge they face in saving enough for college, and continue to report the need for more guidance. A full seven out of 10 parents wish there were more specific guidelines to help save for college. To give parents a better sense of how they are progressing toward their college savings goals, Fidelity developed the "College Savings Quick Check," a simple, interactive calculator to quickly give families a sense for:

  • How overall savings goals could translate to monthly savings goals
  • How monthly savings can grow over time
  • The benefit of starting to save earlier
  • The impact a moderate increase in savings each month could make over the long-term

To get these results, parents just need to answer three questions:

  • What is your savings goal (either per month or in total)?
  • How many years do you have left to save? (until their child heads off to college)
  • What is your anticipated annual investment rate of return? (options are provided)

After entering their answers, parents are shown a visual representation of how much they should aim to save monthly and how their savings could grow year over year, based on their responses. The savings amounts from year to year are broken down between personal contributions and earnings over time which helps to show the power of getting started early. Two scenarios are provided to help parents explore how their results would change if they made changes to their plans such as adding or subtracting a bit in savings, and starting their savings earlier or later.

Additional resources available to help families save and plan for college, whether just starting out, or getting ready to head to campus, include:

Tools and Resources for Advisors

Fidelity also provides financial advisor clients with 529 plan information, marketing support and online tools such as the 529 State Tax Deduction Calculator and the College Savings Planning tool. Financial advisors can get more information at or 1-800-544-9999.

About the Fidelity Investments 2015 College Savings Indicator Study

As part of the study, Fidelity conducted a survey of parents with college-bound children of all ages. Parents provided data on their current and projected household asset levels including college savings, use of an investment advisor and general expectations and attitudes toward financing their children's college education. Using Fidelity's proprietary asset-liability modeling engine, the company was able to calculate future college savings levels per household against anticipated college costs. The results provided insight into the financial challenges parents face in saving for college. Data for the Indicator (number of children in household, time to matriculation, school type, current savings and expected future contributions) were collected by Boston Research Technologies, an independent research firm, through an online survey from June 5 – July 6, 2015, of 2,470 parents nationwide with children aged 18 and younger who are expected to attend college. The survey respondents had household incomes of $30,000 a year or more, and were the financial decision makers in their household. College costs were sourced from the College Board's Trends in College Pricing 2014. Future assets per household were computed by Strategic Advisers, Inc. (a registered investment adviser and wholly owned subsidiary of FMR LLC). Within Fidelity's asset-liability model, Monte Carlo simulations were used to estimate future assets at a 75 percent confidence level. The results of the Fidelity College Savings Indicator may not be representative of all parents and students meeting the same criteria as those surveyed for this study.

About Fidelity Investments

Fidelity's goal is to make financial expertise broadly accessible and effective in helping people live the lives they want. With assets under administration of $5.1 trillion, including managed assets of $2.0 trillion as of August 31, 2015, we focus on meeting the unique needs of a diverse set of customers: helping more than 24 million people invest their own life savings, nearly 20,000 businesses manage employee benefit programs, as well as providing nearly 10,000 advisory firms with technology solutions to invest their own clients' money. Privately held for nearly 70 years, Fidelity employs 42,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit

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