Parents have big dreams of paying the bill for their children's college years, but many are finding it difficult to make those dreams come true.
More than half of parents haven't started saving for their child's college education at all, according to a new survey from Country Financial. And those aren't just the younger parents, either. Some 52 percent of parents aged 40 to 49, and 47 percent of those aged 50 to 64, haven't saved any money for the college years.
Meanwhile, the cost of college keeps rising. For newborns today, the cost of a four-year, in-state college will hit a jaw-dropping $222,000, according to Kiplinger. For a private university, the bill could come to twice that much. Kiplinger assumes a 5 percent annual growth in college costs in making its calculations.
Yet parents still hold out hope of paying for at least part of their children's higher education. About 50 percent want to pay for more than half, according to Country Financial's survey. A quarter of parents aim to pay the entire tab.
How, exactly, will they do that when they haven't saved anything? For many, it may come down to putting off retirement. About 69 percent of parents say they would delay retirement for five years if it meant their child would graduate from college with no debt, the survey said.
Parents paid for about 30 percent of a child's college costs in the last academic year, while students paid for about 12 percent, according to Sallie Mae. Both parents and students borrowed to pay for 22 percent of college costs. That's the lowest borrowing has been in five years as the economy has slowly recovers. The rest of the funding came from grants, scholarships, relatives and friends.
A third of the families who borrowed money hadn't planned on doing so. They were counting on financial aid or savings, but were forced into borrowing when those other options fell through.
Planning can relieve a lot of the pressure of paying for college, said Joe Buhrmann, manager of financial security support at Country Financial. "A child's college education can be one of the biggest expenses for parents, so it is easy to feel overwhelmed," he said.
"Knowing how much loan debt your child is willing to take on and how saving for college fits within your overall financial plan are key issues to consider," he added, "especially since borrowing money for retirement isn't an option."