NEW YORK (MainStreet) – Just because you have a trust fund doesn’t mean you’re getting a free ride to college.
The latest Merrill Lynch Affluent Insights Survey, which tracks the financial views and habits of affluent Americans, finds plenty of concern among the affluent class with the rising cost of college education. A solid 46% of affluent Americans say they are concerned with the cost of higher education, but that number jumps to 99% when looking solely at affluent Americans age 18-34. As such, one in three of those surveyed of all those surveyed had already started a college fund by their child’s first birthday.
The data is drawn from a phone survey of approximately 1,000 Americans with investable assets of $250,000 or more. The survey is conducted on a semi-annual basis by Merrill Lynch, which is owned by Bank of America.
While the survey found these Americans diligently saving for retirement, that doesn’t mean their kids are getting their full tuition covered. A solid 47% of affluent parents said they did not plan to foot the entire tuition bill for their kids.
In many cases that was because they expected their child to receive some amount of aid from scholarships or grants, though we’re guessing there won’t be any federal financial aid forthcoming for these children.
But another big factor had less to do with the high cost of tuition and more to do with financial education and value-building: 30% of respondents said they thought letting their kid pay some of the tuition would make them more appreciative of their education, presumably thinking that their freshman would be less likely to skip class if he or she was paying for it. Another 29% said they hoped that the experience of paying for college – which might necessitate getting a job or managing student loans – would teach them about financial responsibility.
Indeed, financial education seems to be important to affluent Americans with kids. Many of those surveyed said that they had imparted the importance of retirement planning and budgeting to their children, and one in five said that they had brought their child along with them to a meeting with their financial adviser.