Forget Toys! Give the Gift of College this Holiday Season
Clip | 4 minutes
How about giving the gift of college this holiday season? It's more popular than you think. "As college costs continue to rise, more parents than ever are stepping up and making saving for college a priority," said Keith Bernhardt, ?vice president of retirement and college products at Fidelity. "But while parents are off to a good start by adopting these positive savings behaviors, meeting their long-term savings goals remains elusive for many families," said Bernhardt. "More and more, saving and paying for college is becoming a team effort, and the holidays are a great time to take advantage of an often-forgotten savings strategy - encouraging grandparents and other family and friends to consider contributions to your child's college fund as part of a holiday gift." According to Fidelity's recently released 10-Year College Savings Progress Report, nine-in-ten parents say that the gift of higher education is one of the best gifts they ever received. Unfortunately, only four-in-ten have thought to add college contributions to their child's holiday wish list. Grandparents in particular are often eager to help towards college goals, but don't always know how to help. According to Fidelity's survey, 90% of grandparents say they would contribute to college savings if asked, in lieu of or as part of traditional gifts. And 84% of parents would welcome contributions to their child's college savings account in lieu of traditional holiday gifts Parents, friends and family spend roughly $650 per child on gifts during the holidays, according to Fidelity. And parents report that six-out-of-ten kids lose interest in those gifts by July. Looking back, 74% of parents say they would have been okay receiving fewer gifts as a child if it meant more money towards college. The survey also showed that 72% of parents intending to send their kids to college report they have started to save -a record high - compared to just 58% in 2007. More parents say they are saving regularly each month, and more are opening and saving in dedicated accounts, like 529 college savings plans. The not-so-good news is that, on average, parents are aiming to cover about two thirds of their children's college costs, but based on their savings habits today, they're on track to reach less than a third of that goal (29%).