Nearly All Teens Want to Help Pay for College

The majority of American teens feel a need to step in and help foot the bill for college, a new study released by Fidelity Investments reveals. According the fourth installment of Fidelity's annual College Savings Month survey, approximately 95% of American teenagers feel an obligation to shoulder some portion of their college education expenses, and 74% believe their families should foot the bill for nor more than half of their college tuition. Fidelity hopes to use the study results as leverage for promoting its proprietary 529 college savings plan.
Although the students expressed an overwhelming interest in helping their families with a daunting tuition bill, many may not fully understand the full burden of student loans. In 2002, the average student went $17,100 into debt with a monthly payment of $182. Rising college tuitions are more than likely to increase the stress levels of students repaying their loans on minimum wage or entry level salaries.
"The good news is that parents and teens recognize the importance of saving for college, and many have already started to save," said Tracy Lemoine, a senior vice president at Fidelity Investments Institutional Services Company, which is the investment manager for the Fidelity Advisor 529 Plan. "However, our research shows there is a significant gap between when parents think they should save for college and when they actually start to save for college."
The study also identifies a gap between the time in which parents actually begin saving for their children's college education and the time they planned to start setting aside funds. Parents typically say the ideal time to begin a college fund is when a child, is two but the majority of survey respondents wait until the child reaches six. Postponing college savings is one main reason parents come up short when their children graduate high school.
As a result, 79% of parents surveyed by Fidelity said they will rely on their children to help pay for college. In addition, parents are losing additional ground by failing to take advantage of a tax-advantaged investment plan, like a 529 plan. Only one-third of the adult respondents currently use these types of plans for college funding vehicles.