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College Savings

Millennial Parents Saving for College

Parents with little baby at homeFor the past nine years, MEFA and Fidelity Investments have been conducting a study on the preparedness of parents to pay for higher education. Known as the College Savings Indicator (CSI) Study, the data provides insight into the behaviors and perspectives of families saving for college.  Each year, there is valuable data and findings to share, which help shape MEFA’s messaging and outreach on saving for college. This year is no exception. For the next four weeks, we will be sharing highlights of the 2015 CSI study with the first focus on Millennial generation parents.

Millennial generation parents are defined as those who were born between 1981 and 1997. The good news is that this year’s CSI study shows that Millennial generation parents in Massachusetts are saving earlier for college than previous generations.

Among Millennial parents, 68% are saving for their children’s college education. On average, they started when their child was 4.6 years old. However, 13% started before their baby turned one year old, compared to just 5% of Generation X parents.

Why are Millennial parents super savers?

The CSI results show that Millennial parents are driven by the desire to help their children avoid their own experience of paying off student debt after graduation. In fact, 82% say that managing their children’s debt load is their motivation for saving for college.

The research shows that 70 percent of them are still paying off their student loans. In other words, many of these parents are simultaneously paying off their student loans while saving for their children’s college. Indeed, once they finish paying off student loans, 81% plan to redirect those monthly payments to college savings accounts. This year’s study also showed that Millennials are planning to pay 71% of their children’s college costs and that amount is higher than those reported by Gen X and Boomer parents.  Also, these parents (36%) plan to pay their children’s full college bill, a  higher percentage  than previous generations.

While many of these parents have many years before their children enroll in college, they understand the importance of starting early and saving consistently.

If you’d like to start saving for college, we have helpful information to get you started. Visited our Saving for College page to learn more about the two Massachusetts college savings plans, get savings tips, and hear from other parents who started saving.

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