Because she's an educational consultant, no one needs to tell Colleen Ganjian about the rising cost of college.
“I also have a preschool-aged child,” said the 31-year-old Washington D.C. area resident. “Needless to say, college savings is at the forefront of my mind.”
Ganjian is becoming the norm when it comes to Millennials already thinking about college savings for their children. Likely trying to lighten the heavy load many of them were forced to carry, Gen Y-ers are already saving for their kids’ college at an amazing rate, according to new research.
Gen Y parents — some of whom are still paying off their student debt — plan to pay on average 74% of their children's college costs. That’s compared to 64% for Generation X parents and 60% for Baby Boomer parents. On top that, 43% of Millennials aim to pay for the full cost of their children's college education compared to only 32% of Gen X.
Joseph Carpenito, a financial advisor with Raymond James Financial Services, said there a handful of reasons for Millennials to be taking such a proactive approach to their children’s education.
“An increased necessity of a college degree is by far the most common explanation,” Carpenito said. “Gen Y parents are viewing a college degree as less of a value add and more of a necessity when entering today's workforce. This may be why college savings is becoming a necessity within the Gen-Yers budget."He said since so many of these same parents also currently are paying off student debt and experiencing the emotional and financial stress that comes along with it, they don't want this added stress for their children.