14 Signs You’re Saving for College Better Than the Average American

Whether you’ve been saving for your child’s college before they were born or planning to start investing now to help cover some of the costs, it’s challenging for modern families to gauge just how much they should put away.

With added concerns like the rising costs associated with a college education, coupled with record-high inflation rates, you may be wondering if you’re saving as much as your peers who are also trying to help their children pay for their future.

These 15 signs indicate you’re ahead of the game when it comes to saving for college.

While most families with college-bound students would love to be able to shell out cash so their children can go to the college of their choice, research from the Education Data Initiative says only 53% of them have come up with a plan on how to actually pay for these expenses.

So, if you have a strategy in motion, you’re already ahead of nearly half of your peers.

Choosing the right college savings fund for your child can be a confusing process, but if you have one, you already have a leg up.

The Education Data Initiative notes that only 30% of families use a fund — like the tax-deductible 529 plan — to save for college expenses.

Talking to your child about how much they should plan to contribute to their own education, what taking out loans may look like, and other basics also gives families an advantage.

If you’ve chatted with your future student about what you expect them to cover when it comes to making a financial contribution, then you’re in the minority since the Education Data Initiative says that just 20% of families have this chat ahead of time.

If you’ve sought the expertise of a financial advisor when it comes to saving and strategizing for college, you’re already ahead of most Americans. 

The Education Data Initiative notes that when it comes to financial planning, only 15% of families are calling in the pros to help them come up with a solid budget for college spending.

These days, many parents are still managing their own student loans while trying to plan for their child’s education.

A Planning & Progress study from Northwestern Mutual found that one in five Americans who are saving for higher education for a loved one are also still paying off their own college loans.

Having a realistic idea about how much college will cost when your child gets there is a critical part of making a savings plan.

However, according to Fidelity’s College Savings Indicator, 30% of parents are “not sure” what college will cost when their kids enroll — and 55% are just using their own “best guess” to estimate costs.

These days, more parents are realistic about the burden an expensive education can put on a young person — and more are starting to save early.

Fidelity’s College Savings Indicator notes that 74% of parents have already started saving for college in 2024 compared to 58% back in 2007.

Talking to your child about what paying for college will realistically look like appears to put families in a better position to handle the burden of high education costs — and that includes being up front about which schools will be out of your price range.

Fidelity’s College Savings Indicator notes that 54% of parents with children nearing college admit options will be limited due to cost.

There are many perks to using a 529 account, a tax-advantaged savings account designed to pay for various education expenses. Yet, 54% of parents are unaware of these benefits.

The Education Data Initiative notes the average 529 account balance grew by $169.04 per month in 2023.

According to the Education Data Initiative, 54% of tuition comes from the income and savings of students and their families who attend public universities — compared to 41% of those enrolled at private universities.

Since public universities also tend to be cheaper, a student who plans to go public could be in a much better position financially.

The financially savvy parents who can pay off their mortgage before children enroll in college are in an excellent position as that monthly line item on your household budget can go right to school.

Unfortunately, that’s something that simply isn’t feasible for most people. Only 14% of families plan to pay for college expenses by finishing paying their mortgage beforehand.

According to the Education Data Initiative, only 7% of families said they plan for their child to be employed by the college they attend. 

However, participating in a work-study program or getting any gig that can help offset the costs of classes and housing can be a big help for students.

If you aren’t burdened with personal debt, which is something that has been growing for many Americans, you’re in better shape to save more for higher education.

Northwestern Mutual's data shows that personal debt for Americans ticked up to an average of nearly $23,000 in 2024 and 66% of Americans hold at least some personal debt.

Another motivator to talk to your kids candidly about the cost of college: Fidelity’s College Savings Indicator showed that families who have spoken about/planned how they are going to pay for college have a higher median saving.

That number averages around $20,000, which is nearly double the $12,000 average of those who haven’t.

If you’re feeling a bit behind in the college savings game, there are still some simple ways to go about saving more — from picking up a side hustle to earn extra income to looking into the perks of a 529 account.

Even if you’re ahead of the game, you may still want to keep your eye on the prize and frequently re-evaluate the actual costs of sending your child off to college so that you can continue to be financially prepared for whatever the future holds.