60 percent of families with college-bound children have saved

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Sixty percent of parents with college-bound children have saved for their children’s college education, according to a national survey sponsored by Sallie Mae and conducted by Gallup.

The average parent saving for college is on track to save $48,367 by the time their child turns 18, the study found. Most parents of college-bound kids start saving early — when their child is an average of 3.2 years old. Families save an average of $2,923 per year for college, according to the study.

But the study also found that many parents are planning to use retirement funds to pay for their children’s colleges and under utilize use tax-advantage plans, such as 529 college savings plans.

The most common savings methods for parents were savings accounts and CDs (50 percent) and investments such as mutual funds, stocks, money-market accounts and bonds (34 percent). The study also found that about 24 percent of parents use 529 college saving plans and another 24 percent use retirement savings accounts to save for college.

Saving for college has become increasingly important for families, the study showed. About 21 percent of respondents listed college savings as their No. 1 savings priority, while 22 percent said retirement was their top priority.

The national survey included 2,092 respondents.

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