Grandparents tend to be old school about the value of a college diploma, which is why nearly three-fourths (72 percent) think it is important to help pay for their grandchildren’s college education.
For a majority of grandparents, their financial planning is now taking contributing to their grandchild’s college education into account. Nine-in-ten would be likely, if asked, to make a contribution to their grandchild’s college savings fund in place of other gifts, according to new Fidelity Investments research. More than half (53 percent) are saving or plan to start saving to help pay for their grandchildren’s college costs.
According to the College Board, the average cost of tuition and fees for the 2013–2014 school year was $30,094 at private colleges, $8,893 for state residents at public colleges, and $22,203 for out-of-state residents attending public universities.
Thirty-nine percent of senior Millionaires over the age of 65 consider financing their grandchildren’s education one of their primary concerns, according to a 2014 Spectrem’s Millionaire Corner wealth level study. Previous Millionaire Corner research found that half of seniors surveyed were shouldering all college costs, while 20 percent reported footing more than three-fourths of the bill.
Nearly nine-in-ten have factored their grandchildren’s college education into their financial planning. Three-fourths said that paying for their grandchildren’s education was something they had planned to do for a long time. Eight-nine percent said that doing so was not a financial burden, while seven-in-ten said they had not had to cut back in other areas of their budget to pay their grandchild’s educational expenses.
“Contributions from grandparent—big or small-can add up over time and potentially open up a grandchild’s opportunities when making college decisions,” said Keith Bernhardt, vice president of college planning at Fidelity, in a statement. “Ongoing communication between parents and grandparents can help when determining how to grow their savings, as well as how to best leverage those savings to pay for college when the time comes.
Grandparents tend to be old school about the value of a college diploma, which is why nearly three-fourths (72 percent) think it is important to help pay for their grandchildren’s college education, the Fidelity survey found. Among grandparents surveyed who talk to their adult children about financial planning for their grandchildren’s college education, 59 percent give advice about saving for college at least once a year. Nearly half (47 percent) of grandparents are including or thinking about including college savings for their grandchildren in their own long-term financial planning or estate plans.
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Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.