Americans overwhelmingly expect their kids to go to college. Figuring out how to pay for it is another matter.
Nine in 10 parents in this ABC World News Saturday/Sunday poll say it's at least somewhat likely their children will attend a four-year college. But nearly half, 48 percent, also say they're behind where they should be in terms of saving for it. Just 10 percent are ahead.
That's even though few parents plan to foot the whole bill. Just under two in 10 plan to pay all of the cost of their children's college education. About a quarter say they'll pay most of it. But just over half say they'll pay for only some of it, or less than that.
The main alternative to parent-provided funding seems to be hope: More than four in 10 say they're counting on a scholarship or grant. Two in 10 also are figuring on a student loan; as many say their kids will have to help pay from their own savings, and/or to work their way through school. One's counting on the "Tennessee state lottery."
Another option -- the nation's tax-advantaged "529" college savings plans -- suffers from a lack of awareness. Fewer than one in 10 parents has opened a 529 account, mainly because two-thirds haven't even heard of them. Capital gains in these plans aren't taxed, and in some states annual contributions can be deducted from state taxable income.
There's other unsettling news. About a third of parents who've started saving for college have the money mixed in with other savings rather than in a segregated account. That can make it hard to keep the money around for its intended purpose. And 55 percent of college savers have the money in a savings or even a checking account -- hardly the best choice for long-term gains.
Two in 10 are using stock or bond investments outside of 529s, and eight percent are in 529 plans. That leaves 12 percent who say their savings are elsewhere -- including, for one, in "a cookie jar," and for another, in "a box under my bed."
Apart from unfamiliarity with 529s, parents aren't blind to the challenges of paying for college: Eighty percent have given at least some thought to how to pay for it, though fewer, 50 percent, have given it "a lot" of thought. And nearly eight in 10 are at least somewhat confident they'll be able to save enough to help pay the bill. Again, though, far fewer -- 40 percent -- are "very" confident they'll save enough.
College tuition, and room and board, have more than tripled in the past two decades to an average of more than $11,000 a year for four-year public schools and $26,000 for private schools, according to the U.S. Department of Education.
Lack of savings is balanced to some extent by the fact that more parents plan for their kids to go to a four-year college than is likely to happen. While 90 percent say its likely their kids will go to a four-year school, and 74 percent call it "very" likely, the Census Bureau reports that far fewer 2005 high school graduates -- 45 percent -- in fact enrolled in a four-year college. However, another 24 percent went to two-year colleges and other kinds of post-secondary schools, so there still are bills to pay. (The total who enrolled in college of any kind, 69 percent, was a record high.)
Among the parents who have started to save for college, many report some progress: Nearly a quarter say they've saved more than $10,000 and nearly two in 10 have saved $5,000 to $10,000. Four in 10 have saved less than $5,000.