Parents are willing to sacrifice a lot to get their kids through college — perhaps even their own retirements.
According to T. Rowe Price’s “2016 Parents, Kids & Money" survey, more parents have saved money toward their kids’ college tuition (58 percent) than have saved money toward their own retirement (54 percent).
Seventy-six percent of parents said they’d be willing to delay their retirement to pay for kids’ college education, while 68 percent said they would be willing to get a second or a part-time job to help foot the education bill.
In addition, parents are sometimes using their ow retirement accounts to pay for those college credits. Twenty-seven percent of parents are using either a 401(k) or an IRA to save for their kids’ college. Of course, it could be a case of simply not knowing the best way to save for that particular expense, since 43 percent are using a regular savings account, while only 37 percent are using 529 college savings accounts.
Lest you think the kids are appreciative of these grand parental gestures, they’re not: Kids expect their parents to cover their college costs. In fact, 62 percent of kids agree with the statement, “I expect my parents to cover the cost of whatever college I want to go to.”
Many parents are falling in with this entitlement attitude, with 63 percent agreeing with the statement, “I feel guilty that I won’t be able to pay more for their college.” But only 35 percent of parents will be able to cover most of their kids’ college bills, and just 12 percent said they will be able to pay the whole college bill.
So what are parents doing? They’re lying awake at night worrying about it: 42 percent of parents agree with the statement, “I lose sleep worrying about college costs,” up significantly from the 28 percent of parents who felt that way in 2014.
But the joke may be on some of those would-be students, after all. While 67 percent of kids say their parents are saving for their college, 23 percent of those have parents who said that they are are actually not saving for their children’s college.
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