Academic_processionThe average family starts saving for college as their child begins preschool, but only 29 percent say they are on track to reach their savings goal, according to a recent survey by student lender Sallie Mae.

Families saved an average $2,676 annually for their children’s education, for a total of $13,827, the survey found. That represents 3.6 percent of their annual household income. However, households earning under $50,000 annually set aside far more than that, saving 7.5 percent of their income, annually, for college.

The survey was conducted from March 20-April 17, 2009, by the Gallup Organization, which conducted more than 1,200 interviews by phone with parents of children under age 18. Some of the survey’s other findings:

  • “529” college savings plans are gaining in popularity.  Parents with children under age 7 were twice as likely to use 529 plans (43 percent) compared to parents of teens (20 percent.) Overall, 33 percent of parents used these plans.
  • 66 percent of parents said if employers matched contributions that would encourage them to save for college. Another motivator? Parents said a tax benefit (44 percent) would help them save more. (And I can’t leave this one out: 25 percent of parents said a shopping rewards program would also motivate them to save more for college.)
  • Families in the Northeast saved the most with an average of $15,846. The West was a close second at $15,589. The South had an average savings of $13,722, and the Midwest had the lowest with an average of $9,693.

College costs are still increasing faster than inflation, so families who want their kids to get a head start in life should be contributing to college savings plans if at all possible. Anything you save could help reduce your child’s future debt load. For more, read:

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