And who can blame them? Total student debt in the U.S. weighs in at a whopping $1 trillion, and the cost of college tuition has grown at an unsustainable paceup 1,100% over the last 35 years. That's, in part, why the portion of 25-year-olds with student debt jumped to 43% last year compared to 25% in 2003. To make matters worse, more than 40% of recent college grads are unemployedwith nary any prospects to pay down that debt.
Understandably, the families saving for college down the road look at these figures and feel anxiety.
In fact, 71% of people helping to pay for college are worried about the financial burden, according to a new nationwide survey conducted for MainStreet by GfK North America. Those trying to get ahead of the game and accrue a college fund are saving an average of $6,790 annually, according to the survey. The run-of-the-mill savings plans are popular with 53% using a straight savings account, 24% opting for a 529 or prepaid tuition plan, 13% using life insurance and 11% going with a Roth IRA. In fact, the more money you make, the more likely you are to use an advantaged 529 plan, with 24% of those with incomes over $75,000 opting for the 529 compared with only 19% of those with incomes under $75,000.
But those trying to save big for prestigious private schools may be less than enthused with their return on investment: the lifetime earnings advantage of college graduates over those with a mere high school degree is pegged at $279,893just a tad more than the cost of a top four-year institution.