Northwestern Mutual Study Reveals 95% of Parents Saving for Kids’ College Expect to Cover Majority of Costs

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According to the latest findings from Northwestern Mutual’s 2024 Planning & Progress Study, 95% of American parents who are saving for their children’s college education anticipate covering more than half of the total cost. While 36% aim to pay the full expense, 64% expect their children to contribute in some capacity.

Mitchell also highlighted the significance of considering every financial decision within the context of a comprehensive financial plan, especially with regards to retirement savings. He noted, “It’s also important to remember that college loans exist, but there is no such thing as a retirement loan. If parents can’t afford life in retirement, that unexpected financial burden may fall on their kids’ shoulders.”

The study found that two in ten adults in America are currently saving for college, with an average expected total cost of $77,300. These individuals aim to pay off college expenses by the age of 45, recognizing the varying costs associated with different types of schools, levels of institutions, and student living arrangements.

Mitchell concluded by acknowledging the potential benefits of college loans in building future wealth, particularly with regards to income-earning potential. However, he emphasized the importance of thorough planning, especially for professionals with advanced degrees who may face significant college debt. These individuals often seek out disability insurance as part of their financial plan to safeguard their income and ensure financial security in the face of unexpected events.