NEW YORK (MainStreet) With the economy bouncing back and optimism on the rise, many parents finally are starting to tuck away money for their children's ever-increasing future tuition bills.
That was the finding in the recently released "How America Saves for College" annual study by Sallie Mae, which showed after post-recession declines in the proportion of families saving for college, college savings seem finally to be on the rebound.
"The recession tested family finances but parents never wavered from their commitment to help their children pay for college," said Charlie Rocha, senior vice president at Sallie Mae. "Parents today have a renewed spirit of financial optimism giving them the motivation to increase their college savings fund and get back on track towards their goals."
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Previous studies saw the proportion of families saving for college decline after the recession, from 62% in 2009 to 50% in 2013. This year, the number held steady at 51%, along with the fact the average amount saved for college has increased 29% to an average of $3,398. The total average savings also increased, from $11,781 last year, to $15,346.
"The increase in savings is impressive, but one has to set it in the context of the decreases during the economic downturn," said Mark Kantrowitz, senior vice president at Edvisors Network Inc., a family of educational resource sites. "It is, perhaps, a sign of a recovering economy. If one wants to save a third of future college coats a reasonable goal parents of newborns born this year will need to save $250 a month from birth for an in-state public college, $400 a month for an out-of-state public college and $500 a month for a private non-profit college."