Why Aren't Americans Saving For College?

Today's American families know how important a college education is. In fact, not only does the typical bachelor's degree recipient earn about 61% more over a 40-year work life, but higher levels of education are also correlated with better health!(1)

Yet, the 2008 Futuretrust Hopes and Dreams Survey, conducted by Harris Interactive, found that 52% of parents(2) haven't started saving for this particular dream, a costly mistake since time (and compounded interest!) is one thing young families have in their favor.

Even with time, attaining a college education has never been more costly, and parents are concerned -- 72% of parents are worried that college debt will make their child's life more difficult once they graduate and start working. Too many parents -- 42% -- plan to use loans to help their children achieve their education dreams. Another 36% expect to turn to grants, though grants are becoming more and more difficult to tap into. Even loans are growing scarce and increasingly costly to utilize. Combine that information with the fact that college costs are rising

-- over the last five years alone the cost of a public four year college education has risen 51%(3)

-- and it's easy to see why parents are concerned.

So, with 529 college savings plans as a tax-advantaged way to prepare, why aren't more parents actively saving for their children's future? A good question. Here are some answers:

-- 86% of parents said they face obstacles in saving for college. 50% said their greatest obstacle was the rising cost of food, gas and other daily necessities.

-- 42% of parents say the current state of the economy has affected their ability to save for their child's education. Yet 44% did not say that their ability to take a vacation has been affected.

-- Of those who have not started saving, nearly half (47%) say they don't have room in their budget to put money away for college. Sadly, 13% state they aren't saving because the "cost seems too overwhelming."

The good news is that parents don't need to find room in their budgets to put money away. By using savings-generating tools like Futuretrust, these parents can really make their child's bright future a reality. According to Futuretrust President and Founder, Rebecca Matthias, "While most of today's average American families are feeling an economic pinch, they are still buying groceries, paying for gas, and shopping for clothing and other necessities online. If parents use the Futuretrust card for these daily purchases, their children will be able to reap the rewards." -- Futuretrust

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