--- title: Here's the No. 1 Barrier Blocking Parents From Saving More Money for College description: More parents are saving for college, but inflation and rising college costs are challenging their plans, a new Fidelity survey finds. authors: - name: Kaitlin Mulhere role: Editor url: https://money.com/author/kaitlin-mulhere/ bio: Kaitlin Mulhere is an editor at Money.com. Since joining in 2015, she’s written and edited about a variety of personal finance topics, including banks, credit, student debt, saving strategies and more. education: University of Florida at_money_since: 2015 articles: 217 covers: - Education - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Retirement - Shopping - Taxes social: - https://twitter.com/KMulhere - https://www.linkedin.com/in/kaitlin-mulhere-64503048/ editors: - name: Julia Glum role: Managing Editor url: https://money.com/author/julia-glum/ bio: Julia Glum joined Money in 2018 and specializes in covering financial trends that affect everyday Americans' wallets. She also writes Dollar Scholar, a weekly newsletter that teaches young adults how to navigate the messy world of money. education: University of Florida at_money_since: 2018 articles: 453 covers: - Education - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - Newsweek - International Business Times - CBS News - Good Morning America - WUSA9 - Pix 11 - The New York Times - Mashable - The Washington Post - CNBC - Politico social: - https://x.com/superjulia - https://www.linkedin.com/in/julia-glum published: '2024-08-01T18:47:25.000Z' modified: '2024-08-01T18:47:25.000Z' section: Education tags: - News word_count: 778 canonical: https://money.com/college-savings-inflation-fidelity/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![A hand holding a miniature piggy bank.](https://img.money.com/2024/07/News-Inflation-Tuiition-College-Savings.jpg) Inflation and climbing college costs are stressing out parents who are trying to put away money for their kids’ college education. A quarter of parents see inflation as the most significant barrier to their ability to save, according to results of a Fidelity Investments [study](https://preview.thenewsmarket.com/Previews/FINP/DocumentAssets/673683.pdf) released Thursday. Overall, a whopping 93% say they’re concerned about inflation and rising education costs when it comes to saving for college. And while most parents say they plan to keep their savings rate steady this year, 64% of those who anticipate reducing their contributions blame inflation. Inflation has been [cooling](https://money.com/fed-interest-rate-cuts-september-predictions/), and average net tuition — or the amount families pay colleges after financial aid — has actually [dropped slightly](https://money.com/college-tuition-prices-decreasing-inflation/) in recent years. But neither of those positive developments are enough to reverse decades of increasing prices that have made [college feel financially out of reach](https://money.com/college-students-drop-out-money/) to many Americans. For the upcoming school year, the average in-state net price for tuition, fees, housing and food at public four-year colleges tops $15,000, according to the College Board. For students at private colleges, the average net price for a year jumps to $30,560. At public colleges, that's about 70% more than 20 years ago, before adjusting for inflation; at private colleges, it's nearly 60% more. ## Get ahead of the 2026-2027 school year and apply for your Student Loan today ### Lenders like College Ave can put a world of possibility within your reach. Get the financial aid you need to cover tuition and materials. Click on your state to find out how. [View Rates](https://money.com/pr/k634bba49309?ap_referrer=%2Fcollege-savings-inflation-fidelity%2F) “While parents prioritize their children’s college education, the reality is that balancing day-to-day expenses with long-term savings can be daunting,” Tony Durkan, a vice president at Fidelity, said in a news release. On the bright side, more parents are stashing away [money for college](https://money.com/how-to-pay-for-college/). Seventy-four percent of parents say they're saving for college in this year’s survey, compared to 58% in 2007, when the study was first conducted. ## New advantages to 529 college savings plans College tops parents' saving priorities, coming in ahead of both saving for retirement and building up an emergency fund. While helping pay for college has long been a financial goal for parents, the increasing reliance on [student loans](https://money.com/student-loans/) today is a major motivator. More than 70% of parents named student debt as a factor in why they're saving for college. Parents report having lofty savings goals, too, saying they ultimately hope to pay for two-thirds of their child’s education. And yet, Fidelity finds that families are on track to cover just 30% of expected college costs. Parents’ readiness for paying for college is related to how they’re saving, according to the survey. Parents using a [529 college savings plan](https://money.com/best-529-plans/) have a median of $25,000 set aside compared to $14,000 for those without a 529 account. The first group is also on track to meet 46% of their college savings goals, while the latter is on track to cover just 20% of their goal. In general, financial planners like 529 plans because they offer higher long-term returns than a traditional savings account and [tax-free earnings when used](https://money.com/how-to-spend-529-college-savings/) for a growing list of approved educational expenses. But new legislation makes them more flexible. As of this year, assets in a [529 plan can be transferred to a Roth IRA](https://money.com/529-roth-ira-rollover/) (individual retirement account) for the beneficiary if they meet certain criteria. In other words: Parents don’t have to worry about paying a penalty if their child ends up not attending college or not needing the money in a 529 for higher education. Instead, the account can give their kid a jumpstart on their retirement savings. In the Fidelity survey, about two-thirds of parents reported they weren’t aware of the new 529 rules, though after learning about it, many parents reported they’d consider using the feature. Plus, 36% of respondents say they’re more interested in putting more money in a 529 account given the new rule. Setting up regular contributions to a 529 plan, even when small, can help you reach your savings goals. For example, Fidelity calculates that contributing $50 a month to a 529 plan for five years will add $3,350 to your coffers. If you can swing $150 a month for five years, that will add up to more than $10,000 for college. And as always, the earlier you start saving, the longer your money has to grow. Contributing $50 a month for 15 years adds up to $12,800 — or enough to cover a year’s worth of in-state tuition and fees at public colleges in 35 states. The Fidelity study is based on a survey of 1,985 families nationwide with household incomes of at least $30,000 and children aged 18 and younger who are expected to attend college. ## Compare Student Loan companies to find the right fit ### Cover up to 100% of your college costs ![View Rates](https://s3.consumersadvocate.org/prd/image/image/24903/medium_b6089714-807b-4b5a-88f9-defb35d74711.png) Our Partner [View Rates](https://money.com/go/48a23765c855?bidid=4131428440&pmeta=p129-c550-u24512&ptid=672331861&ptoken=2fd8b442c4e79bc24566553bef29f2ef) ### Apply online in minutes ![View Rates](https://s3.consumersadvocate.org/prd/image/image/29957/medium_1bf2c50c-d2fe-4492-bad2-f4bca2475954.webp) Our Partner [View Rates](https://money.com/go/8ef31716f0b9?bidid=4131428438&pmeta=p129-c550-u24512&ptid=672331861&ptoken=5437d64c1a0bf6c3192f0f630c28ae5c) ### No fees ![View Rates](https://s3.consumersadvocate.org/prd/image/image/38573/medium_5a7ddb75-a315-44cf-8526-1594057ec7d6.webp) Our Partner [View Rates](https://money.com/go/95d39ba80808?bidid=4131428444&pmeta=p129-c550-u24512&ptid=672331861&ptoken=c0c3aa2b7e6e8dfa43e4239e8fe04c73) ### Provides customized private loan options for students ![View Rates](https://s3.consumersadvocate.org/prd/image/image/38575/medium_3b0e137f-8ec1-4f32-a340-85efa53e0aab.webp) Our Partner [View Rates](https://money.com/go/5f084ae5be8a?bidid=4131428442&pmeta=p129-c550-u24512&ptid=672331861&ptoken=7edad8355cc739065321ce792540d591) ### Rates starting at 2.99% ![View Rates](https://s3.consumersadvocate.org/prd/image/image/38576/medium_d3a42618-1276-44ce-95cf-561a8f89efa8.webp) Our Partner [View Rates](https://money.com/go/913a8163d41a?bidid=4131428445&pmeta=p129-c550-u24512&ptid=672331861&ptoken=d645c9aa6cd0623df13729632b481ecc) ![](https://s3.consumersadvocate.org/prd/image/image/24903/medium_b6089714-807b-4b5a-88f9-defb35d74711.png) Reach new academic heights with College Ave [View Rates](https://money.com/pr/y61180a308af?ap_referrer=%2Fcollege-savings-inflation-fidelity%2F) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/college-savings-inflation-fidelity/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Education", "item": "https://money.com/education/" }, { "@type": "ListItem", "position": 3, "name": "Paying for College", "item": "https://money.com/paying-for-college/" }, { "@type": "ListItem", "position": 4, "name": "Here's the No. 1 Barrier Blocking Parents From Saving More Money for College" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/college-savings-inflation-fidelity/#webpage", "url": "https://money.com/college-savings-inflation-fidelity/", "name": "Here's the No. 1 Barrier Blocking Parents From Saving More Money for College", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2024-08-01T18:47:25.000Z", "mainEntity": { "@id": "https://money.com/college-savings-inflation-fidelity/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/college-savings-inflation-fidelity/#breadcrumb" }, "dateModified": "2024-08-01T18:47:25.000Z" }, { "@type": "NewsArticle", "headline": "Here's the No. 1 Barrier Blocking Parents From Saving More Money for College", "articleSection": "Education", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2024/07/News-Inflation-Tuiition-College-Savings.jpg", "width": 2880, "height": 1920, "caption": "News-Inflation-Tuition-College-Savings" } ], "author": [ { "@type": "Person", "name": "Kaitlin Mulhere", "url": "https://money.com/author/kaitlin-mulhere/", "@id": "https://money.com/author/kaitlin-mulhere/#author", "description": "Kaitlin Mulhere is an editor at Money.com. 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