Fewer families are saving for college, with many feeling overwhelmed

by Grace

The number of families saving for college has dropped to 50%.

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From How America saves for College 2013, a survey commissioned by Sallie Mae conducted by Ipsos Public Affairs

Not only did fewer families save for college last year, but they also saved less. Parents who saved have socked away almost $12,000 total last year, a sharp drop from over $20,000 reported in 2010. That might explain why only 55% of those who are saving for college said this year that they feel confident about being able to cover the costs.

Most parents expect their children to get scholarships and grants, which on average have dropped to about $6,000 per student.

For those parents who aren’t saving for college, 53% say a major reason is that they can’t afford it. Another 18% cite that as a minor reason, while 13% say a lack of money plays no role in their college-savings decision. More than half of nonsavers say they’re not saving at least in part because they expect their children to receive scholarships and grants to cover college costs.

But that’s a risky calculation to make, as the average amount of funding U.S. undergraduates got from grants and scholarships fell 15% during the last academic year. On average, students received $6,077 in grants and scholarships in the 2011-2012 academic year, down from $7,124 a year earlier, according to a July Sallie Mae study.

Whatever their income level, non-savers say they simply don’t have the money for college.

Unsurprisingly, 70% of parents with income below $35,000 say a lack of money comprises at least part of the reason why they’re not saving for college. But what is a shock is that the share of families who earn between $35,000 and $100,000 and say they can’t afford to save is even higher, at 74%. (Among families earning $100,000 or more, 72% of respondents cite money — or lack thereof — as a reason for not saving.)

Only 38% of parents feel confident about meeting the costs of college.  Many feel overwhelmed, annoyed, angry, or frustrated.

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