College costs force saving
But parents also pressured to economize
Massachusetts parents are saving more for college than they have at any time since the recession, but rapidly rising costs are requiring them to adjust expectations and approaches to financing their children’s education, according to a survey released today by Fidelity Investments.
Based on current and expected rates of savings, Massachusetts families are on track to cover about 24 percent of college costs, up from 18 percent last year, and the highest share since 2007, according to the Boston mutual fund company’s survey. Nationally, families are on track to cover just 16 percent of college expenses.
Meanwhile, Massachusetts parents are increasingly choosing lower-cost public colleges and universities over private institutions; asking children to pay more toward their educations; and having them live at home and commute to classes.
“Data year after year shows that families take saving more seriously,’’ said Thomas Graf, executive director of the Massachusetts Educational Financing Authority, which helps families pay for college. “This survey helped us see a better way to get people to save for college by understanding the pressures families have and how people respond to those pressures.’’
The authority and Fidelity have conducted the survey annually over the past five years to assess how prepared families are to cover college costs.
Parents here and nationally have lost ground since 2007, when Massachusetts parents were projected to be able to cover 29 percent of college costs, and families nationwide about 24 percent. A struggling economy and tumbling stock market played a role in the declines, but rising costs also contributed.
Last year, average tuition and fees ranged from $2,713 per year at public two-year colleges to $33,679 at private research institutions, according to the College Board, a not-for-profit college information organization that administers the SAT tests.
This year in Boston, the most expensive schools are Boston University, with tuition and other charges totaling more than $54,000, and Northeastern University, where they top $51,000.
Nearly half of Massachusetts parents who answered the survey said they would encourage their children to attend public universities or colleges, up from less than 30 percent in 2007, according to the survey. About half the parents said they would have their children live at home and commute to school, up from about one-third in 2007.
At the University of Massachusetts Boston, which is largely a commuter school, undergraduate enrollment has increased 20 percent to about 12,000 over the past four years, said Kathleen Teehan, vice chancellor. In-state tuition and fees for commuter students total about $11,000.
“The increasing popularity of UMass Boston has to do with our cost of public education being only 25 percent of a typical private education in the area,’’ Teehan said. “Parents look at the rising cost of private education, and they are starting to realize that they have an asset in public universities.’’
Parents are taking a variety of other steps to lower costs and pay for college, according to the survey. One in four respondents said they are asking children to graduate in fewer semesters, up from one in 10 in 2007. More than half have asked children to help pay for college, up from about 40 percent.
Sixty-six percent said they are considering having their children work part time to manage college costs, up from 49 percent in 2007.
“A key factor to saving for college costs is shared accountability between parents and children to achieve saving goals,’’ said Joe Ciccariello, vice president of college planning at Fidelity Investments.
Two-thirds of Massachusetts parents in the survey said that they will require their child to maintain a high grade point average in order for them to finance the student’s education. The average GPA that parents will require of their children during college is 3.0 out of 4.0.
“Massachusetts, being a state that values higher education, the education level is generally higher than other states,’’ said Graf, of the Massachusetts Educational Financing Authority. “Families acknowledge how important college is to a child’s future.’’
Christina Reinwald can be reached at firstname.lastname@example.org