A new survey of high school students across the country showed a strong uptick in college savings habits and a willingness to make the tradeoffs necessary to attain higher education. The students participating in the College Savings Foundation's fourth annual How Youth Plan to Fund College survey seem willing to pursue a variety of ways including working and going to school part time to avoid at least some of the student debt that is threatening to drag on the economy.
The strongest outcome was the finding that sophomores, juniors and seniors across the country are proactive about saving, with 74 percent planning to save money for college or post-secondary school. Over half of them, 53 percent, have already gotten a job to earn money for college, compared to 46 percent among last year's students.
Nearly half of the high school students surveyed have started saving already: 49 percent, up from 45 percent last year; and of those a whopping 77 percent having already saved $1,000, up from 72 percent last year.
Perhaps part of that success stems from the fact that nearly 29 percent of students are saving through a 529 college savings plan – theirs or their parents (22.1 percent through their parents and 6.5 percent on their own).
"This generation of students was born at the inception of 529 college savings plans. It's exciting to see their enthusiasm as well as their parent's enthusiasm for saving early and strategically," said Roger Michaud , Chair of CSF, a leading nonprofit helping American families save for their children's higher education.
Not only are more students planning to use their own funds for college or higher education, but they also intend to cover more of their costs. Sixty-seven percent of students plan to use their own funds for college, up from 65 percent last year. Those who plan to pay for 26 – 50 percent of the costs have increased dramatically to 43 percent from 35 percent last year. The number of students covering less than 25 percent of college costs has dropped to 41 percent from 46 percent.
How will they cover these costs? The vast majority – 93 percent – say they will or may work while in college – a reality that will force many to attend school part time, or have less time to study. Yet many of these students are undaunted, with almost half, 45 percent, acknowledging that working will be "a good experience."
Students are addressing the costs of college directly by pulling away from higher priced private colleges: only 17 percent plan to attend private colleges – down from 21 percent last year; and 47 percent are headed to public college, up from 45 percent last year.
They are also more willing to forgo material things like electronics or a car in order to save for college – nearly 59 percent up from 56 percent last year.
More students are expecting to receive help from relatives – 45.5 percent, up from 41 percent – and they are expecting a lot more of it: 41 percent expect to get over $5,000 toward higher education, compared to 29 percent last year.
Twenty-nine percent said they are looking at online learning to reduce costs.
Despite their intentions to save and work, students are still resigned to borrowing – 66 percent versus 63 percent last year. 36 percent have researched student loans, up from 31 percent last year. Students are clearly concerned with their debt burden after college: 79 percent of all students said they would feel better about college debt if they had savings.
Over 78 percent of students said that costs were definitely or possibly affecting further education plans.
"The burden of debt casts a heavy shadow on our children's future," Michaud said. "We found that it narrows their college choices and can impair their ability to make financial commitments in the future. Saving early and often is a parent's best strategy for positioning children for financial stability."
The online survey was of more than 500 sophomores, juniors and seniors across the country, with parental permission.
For charts, see: www.collegesavingsfoundation.org