The next generation of college students might get a part of its funding from the Bank of Pepere and Memmy.
More and more grandparents, according to a new study from Fidelity Investments, are getting involved in the planning and financing of their grandchildren’s college education.
“... many grandparents value a college education and consider it an important component to providing young people with the best opportunity to succeed. They also recognize that as the cost of college continues to rise, parents and grandchildren face a big challenge in saving enough to cover costs, and that without help their grandchildren could face a significant financial burden after they graduate,” Fidelity said in a statement about its 2014 Grandparents and College Savings Study.Here are some of the numbers from the study:
- 72 percent of grandparents think it’s important to help grandchildren pay for their college education;
- 53 percent of grandparents are saving or plan to start saving to help pay for college costs;
- 90 percent report they would be likely, if asked, to make a contribution to their grandchild’s college savings fund for special occasions in place of other gifts;
- Asked how much they anticipate contributing to college education funds of all their grandchildren, they report a median of $25,000, with 35 percent expecting to contribute $50,000 or more;
- Among those who talk to their adult children about a grandchild’s college education, 59 percent give advice about saving for college at least once a year;
- 37 percent say they worry about their grandchild’s ability to attend college without incurring significant student loan debt.
“For many families, saving for college has become a team effort, and many grandparents aren’t content to sit on the sidelines,” said Keith Bernhardt, vice president of college planning at Fidelity.
“Contributions from grandparents – big or small – can add up over time and potentially open up a grandchild’s opportunities when making college decisions. Ongoing communication between parents and grandparents can help when determining how to grow their savings, as well as how to best leverage those savings to pay for college when the time comes.”
From the sounds of the research, it seems that the Baby Boomers who were actively engaged in their children’s college pursuits intend to carry on with their children’s children.
In many families, according to Fidelity, grandparents are taking part in college planning discussions: 69 percent of grandparents acknowledge talking to their children about college issues, including the total cost of college and how the family will pay for it, 53 percent talk directly with their grandchildren as well.
For grandparents currently saving or thinking about saving for a grandchild’s college education, Fidelity has some recommended reading:
An overview of 529 College Savings Plans
How to give your grandkids a head start