Key Points
- A record 84% of parents have started saving for their children’s college education, up from 74% in 2024.
- Parents carrying their own student loans are the driving force: 88% say that debt motivates them to help their kids save, while 55% say loan payments delayed their retirement savings.
- Families with a 529 plan have nearly twice as much set aside as those without ($45,752 versus $24,387) and are closer to hitting their savings targets.
Parents who spent years paying off their own student loans are trying to make sure their children never have to. New research from Fidelity Investments found that 84% of parents have started saving for their children’s college education. That number is a record for the firm’s College Savings Indicator study and a sharp jump from 74% in 2024. It is the clearest sign yet that the borrowing patterns of one generation are reshaping how the future pays for school.
The share of parents planning to pay the entire cost also climbed. 41% percent said they intend to cover the full cost of their children’s education, up from 37% two years ago.
Those expectations are running into a college price tag that keeps climbing, though what families actually pay out of pocket is often well below the published sticker price.
Fidelity has tracked this shift across multiple survey cycles, including its 2025 study on how students and parents view debt, which found affordability climbing the list of factors families weigh when picking a school. Amanda Verstegen, SVP, Head of Savings and Lending at Fidelity, framed the 2026 results as a continuation of that trend.
“We’re seeing a meaningful shift in how families are thinking about paying for college, with many parents choosing to take on more of the overall cost of their children’s higher education,” Verstegen said. “Parents increasingly want to reduce the financial burden their children may face after graduation, and many are taking proactive steps to do so.“
Would you like to save this?
We'll email this article to you, so you can come back to it later!
Student Debt Has Become A Two-Generation Problem
88% of parents said their own student debt motivates them to help their children save more for college. That feeling tracks with what current families are facing: the class of 2026 is projected to borrow about $43,500 for a bachelor’s degree.
The student loan debt crisis is leaving marks. More than half of parents (55%) said paying off their loans delayed them from starting to save for retirement. Another 48% said their loans hindered their ability to save for their own children’s education. In other words, the cost of one generation’s degree directly reduced what the next generation had available to spend and save.
That trade-off is important to understand. A borrower who postpones retirement contributions in their late 20s and early 30s loses the compounding years that matter most, and the money that would have gone into a 401(k) or a 529 plan instead went to their student loans.
The parents in this study lived that (the average time to repay an undergraduate balance runs into a borrower’s late 30s) and they are responding by front-loading savings for their kids.
Employers have also taken note. Fidelity found that student debt support benefits grew from 8% of employers to 10% in 2026, and employers offering them reported a 26% reduction in turnover. A growing list of companies now offer repayment assistance, and up to $5,250 a year of that help is tax-free to the employee.
The Growth Of 529 Plans
Parents who opened a 529 college savings account have nearly twice as much saved on average as those who have not: $45,752 vs. $24,387. They are also on track to meet 57% of their savings goal, compared with 48% among families without one.
The use of 529 plans is also increasing. Nearly half of families (45%) have opened a 529, up from 39% in 2024, though only 38% of parents overall report saving in an account dedicated to college.
That mirrors industry data showing 529 balances hitting record highs, and it still leaves a majority of families saving in vehicles that were not built for education costs. Parents weighing the alternatives can compare 529s against custodial accounts and Roth IRAs before committing.
“The data consistently shows that families who choose to save in a dedicated college savings account are able to make more meaningful progress toward their goals,” Verstegen added.
The 529 plan is generally regarded as the best tool to save for education. Earnings grow federally tax-free when used for qualified education expenses, most states offer a deduction or credit for contributions, and the types of qualified expenses continues to grow.
The 529-to-Roth IRA rollover created by the SECURE 2.0 Act also removed the “what if my kid doesn’t go” objection that kept many parents on the sidelines. Up to $35,000 per beneficiary can move into the child’s Roth IRA over a lifetime (subject to some rules and restrictions) though not every state conforms, so families should confirm their own state’s treatment.
Parents who end up with money left over have other options for unused 529 funds as well.
What It Means For Your Household
On average, parents hope to pay 72% of their child’s education and they currently feel like they’re on pace to fund 53% of that. Running the numbers through a college savings calculator is the fastest way to see where your household actually stands.
Parents report saving around $9,000 a year towards their children’s college on average. The wild part is that could still end up short of what a four-year degree runs at some schools once room, board, and fees are counted. This is why families need to look at colleges based on the net price, not the sticker price. Benchmarks for how much to have saved in a 529 by age also give families a way to check progress before senior year.
Families looking at a college savings shortfall have four levers: save more per month, extend the timeline by starting earlier, revise what share of the bill they will cover, or shift the college list toward lower-cost options.
That last lever is both the most effective but also the hardest to execute in practice.
For the 16% of parents who have not started saving for college, the barriers are familiar. 68% cited other, more pressing financial priorities. 44% said they felt too overwhelmed to start thinking about it. 36% said they did not know how much to save.
The first barrier is legitimate: the order of operations for saving for college puts a parent’s own emergency fund, high-interest debt, and retirement ahead of a child’s tuition. You need to put the oxygen mask on yourself before helping your children.
The overwhelm problem has the easiest fix: open a 529 plan with whatever amount you can – even $100, set a small automatic monthly transfer, and adjust later. Most plans have no minimum, and several brokerages let you open a 529 in minutes.
The families in this study who ended up with twice as much saved did not necessarily earn twice as much, they just made consistent progress.
Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.