May 30, 2012
, Inc. (NYSE:LM) released findings today from their
Intergenerational Survey of College Finances
highlighting that among mass affluent and affluent families, 72% believe that children should pay a portion of their college expenses. Over 1,000 parents with
or more in investable assets were surveyed to identify financial planning behaviors and expectations when it came to college funding. A majority thought their kids should contribute a small portion of the total, while close to one-third thought they should contribute up to half. Only 7% thought children should contribute most of it and 2% believed children should be responsible for the full amount.
Parents who thought their children should contribute something cited the need to make sure they took college education seriously and appreciated it (63%), as well as to teach them some responsibility (34%). The 28% of parents who thought their children should not pay for any of their college expenses listed several reasons including: education is a parent's responsibility (41%); to stay focused on their studies (33%); to keep them out of debt (21%); or so they can enjoy the college experience (5%).
Funding college expenses for one or more children can be such a material event that it impacts the entire family for many years. Whether parents save in advance of college with 529 plans, or make up the underfunded portion through the use of current income, drawing from savings accounts or loans, it seems that most are making their children aware of the family's sacrifices in order to appreciate the importance of getting the most out of college.
"Almost three-quarters of all surveyed parents have decided to use the college experience as an opportunity to teach their children not just about overall responsibility, but also about fiscal responsibility," said
, Head of
's Global Asset Allocation (LMGAA) Group. "Many parents also used the time leading up to college as an opportunity to impress upon their children the impact college expenses can have on their life even beyond the college years."
Parents discussed financial topics such as:
- Budgeting: 85%
- How to invest: 53%
- Earning money: 94%
- How their college will be paid for: 87%
- Savings planning: 78%
They also discussed college funding topics such as:
- The need for children to contribute to expenses: 73%
- The types of schools they can afford: 67%
- Scholarship options: 82%
- The impact of carrying a student loan: 63%
- The expenses that come with college: 92%
"These numbers are encouraging as they indicate that parents are teaching their college-aged children to budget wisely and to understand the importance of proper saving and investment behavior, including the negative impact of excessive debt," noted Kenney. "As parents we all want a better life for our children, achieving that goal requires a commitment to a greater level of fiscal responsibility."