Investing

College saving put on hold

Over a third of parents have slowed or stopped saving for their children's education as they struggle with higher food and energy costs, a survey from TD Ameritrade Holding Corp. suggests.

Over a third of parents have slowed or stopped saving for their children’s education as they struggle with higher food and energy costs, a survey from TD Ameritrade Holding Corp. suggests.

However, 87% of parents surveyed still considered saving for college to be “extremely or very important.”

“Respondents felt that they could scale back on education because they felt that there was enough time to recoup their savings,” said Diane Young, director of retirement and goal planning at Omaha, Neb.-based TD Ameritrade. “Families understand that saving for college is a long-term goal and allows people saving money to be flexible.”

“Many parents can scale back this year, but they can make it up when times get better,” Ms. Young added.

According to the survey, 60% of parents expected that it would take 11 years or more to save enough money to cover the cost of their children’s college education.

“More individuals are being thoughtful about how to prepare to cover those costs,” Ms. Young said.

Ninety-three percent of those surveyed said they planned to pay or had already paid for a child’s education through savings accounts (60%); cash (54%); student loans (48%); investments, including individual retirement accounts or bonds (39%); and equity lines of credit (13%).

TD Ameritrade’s findings are based on a telephone survey of 1,005 parents conducted from July 31 to Aug. 3 by Opinion Research Corp. of Princeton, N.J.