OMAHA, Neb.--(BUSINESS WIRE)--Cap and gown season is in full swing, and parents of the class of 2017 are preparing for the reality of an empty nest come fall. In spite of the climbing costs of college tuition, a majority of teens expect to continue their education after high school with two-thirds (65 percent) planning to attend college at some point. Nearly half (49 percent) of respondents are hanging college hopes on snagging a scholarship. That’s according to the 1,000 teens (ages 13-19) who took part in TD Ameritrade’s Teens and Money survey.
“With so many teens expecting to attend college, it’s more important than ever for families to have open conversations about what those plans will cost. It’s an opportunity to put all the cards on the table to set expectations on who’s paying for what,” said Carrie Braxdale, head of investor services at TD Ameritrade. “Speaking with your kids early and often about all of the options available to them after high school empowers them to take steps to work toward their dreams.”
Life after High School
- More than a third (35 percent) are thinking of taking a gap year between high school and college
- Three in ten are considering a two-year instead of four-year degree
- Nearly 20 percent say they may delay college due to expense
- Technical degrees or trade school are seen as options for one in five teens (20 percent)
- Four percent of teens aren’t planning to pursue any post-secondary education
Stephanie Q., an 18-year old from the Chicago suburbs, plans to enroll at the University of Illinois in the fall. “Everyone in my circle of friends is heading straight to college, whether it be a big name school or community college,” she says. “I’ve definitely noticed that community colleges are getting way more popular. It’s seen as a way to get the basics out of the way more cheaply before transferring to a four-year college or university.”
Teens who expect to go to college feel that college is:
- The best way to achieve career goals (70 percent) and earn a higher income (53 percent)
- Something their parents want them to do (45 percent)
- An experience they don’t want to miss out on (40 percent)
Costs Are Top-of-Mind So Teens are Taking Matters into Their Own Hands
The top concerns about going to college are all financial. Teens worry about struggling to pay the tuition (19 percent), taking on too much debt (15 percent) and finding a good job after college (13 percent.) Of those teens expecting to go to college:
- Six in 10 (63 percent) are saving for their own education, with one-third (32 percent) having more than $1,000 saved and one in 10 (10 percent) having $5,000 or more
- A quarter (24 percent) have parents who have not or will not save for their college
- One in five (21 percent) don’t know if their parents are saving for their college
- More than 20 percent (21 percent) believe their grandparents are saving for college
- Teens expect to pay for some or all of their text books (65 percent), other living expenses (65 percent), tuition (51 percent) and room and board (48 percent)
“It’s fantastic to see a majority of college-bound teens saving for the related expenses. Clearly, teens understand the escalating costs of college and aren’t expecting their parents to foot the entire bill,” said Braxdale. “The harsh reality is that paying for college may be the toughest part of earning a degree. Teens and their parents shouldn’t wait to explore the various college savings plans available to them – start as early as possible. Remember that no amount is too small to take advantage of the power of compounding interest so your college savings can pack the biggest punch.”
Braxdale offers these college savings tips:
- Parents: Plan in advance, save early and often. Create a sound financial plan for how your family will cover costs. Clearly outline and talk with your teen about the options available to pay for college, and how that fits into other long-term financial plans.
- Teens: Don’t wait for your parents to bring up the topic of saving for college; ask them what their plans are and share yours. Stick to a budget and save as much as possible from summer and part-time jobs to cut down on student loan debt in the future.
Parents can learn more at TD Ameritrade’s saving for college website and determine which savings plans might be right for them, including 529 College Savings Plan, Coverdell Education Savings Account and Custodial Accounts. Get to know more about Stephanie and other members of the class of 2017 at Fresh Accounts.
About TD Ameritrade Holding Corporation
Millions of investors and independent registered investment advisors (RIAs) have turned to TD Ameritrade’s (Nasdaq: AMTD) technology, people and education to help make investing and trading easier to understand and do. Online or over the phone. In a branch or with an independent RIA. First-timer or sophisticated trader. Our clients want to take control, and we help them decide how - bringing Wall Street to Main Street for more than 40 years. TD Ameritrade has time and again been recognized as a leader in investment services. Please visit TD Ameritrade’s newsroom or www.amtd.com for more information, or read our stories at Fresh Accounts.
Survey conducted by Head Solutions Group
Head Solutions Group (U.S.) Inc., is a leading market research partner for Financial Services companies in North America. With offices in New York, Toronto and Montreal, Head delivers the deep customer insights that increase institutional knowledge and propel business action. TD Ameritrade and Head Solutions Group are separate and unaffiliated firms and are not responsible for each other’s services or policies.
About the 2017 Teens and Money Survey
A 15-minute online survey was conducted with 1,000 American teenagers age 13 to 19 by Head Solutions Group, between March 17 to 22, 2017, on behalf of TD Ameritrade Holding Corporation. The statistical margin of error for the total sample of N=1,000 American teens within the target group is +/- 3.1 percent. This means that in 19 out of 20 cases, survey results will differ by no more than 3.1 percentage points in either direction from what would have been obtained by the opinions of all target group members in the United States. Sample was drawn from major regions in proportion to the U.S. Census.
Source: TD Ameritrade Holding Corporation