WASHINGTON, Sept. 25 (UPI) -- Saddled with overwhelming student debt, a growing number of young parents say they plan to cover the full cost of college for their children rather than have them face the same fate, a new survey found.
Millennial parents, ages 18 to 34, said they're aggressively socking away money for college educations despite still paying off their own student loans. Nearly half -- 46 percent -- of young parents intend to bankroll their children's entire college bill, a new survey by Fidelity Investments found. A larger number, 74 percent, plan to cover nearly three-quarters of the college costs.
The driving force? Money.
"More than any other generation, millennials have experienced firsthand the balancing act of paying off student loans while striving to become financially independent, which has likely propelled many of them, as parents, to take action," Fidelity researchers said.
Researchers found nearly 70 percent of millennial parents are saving for their children's higher education -- up from 64 percent in 2014 -- and have strategically developed financial plans to reach college goals for their children, including using tax-advantaged 529 savings accounts. These parents are also more willing than older parents to talk to their children about college costs.
"Millennials have weathered challenging economic conditions for much of their adulthood. Many have channeled that experience into setting college savings goals early and taking steps to make savings a regular habit," said Keith Bernhardt, vice president of retirement and college products at Fidelity.
The new research comes amid continuing concerns about college costs, student loans and the future of higher education. Today, an estimated 43 million Americans owe an about $1.2 trillion in student loan debt. About $103 billion of that is in default, meaning graduates can't or won't pay back their loans.
While the new study shows millennials are aware of the financial challenges their children may face when it comes time for college, the bigger question is if they're being realistic. Recently, Forbes contributor Troy Onink estimated a top 100 college on Forbes Best College list will cost upward of $500,000 in 18 years after factoring in 4 percent annual tuition increases, roughly the speed the costs are growing.
Then when you consider wages are not growing commensurate with ever-increasing college tuition, the dream of paying for college in cash could be wishful thinking. At the same time, millennials also need to save for retirement, bringing even more financial considerations into view. A recent study by Investor Protection Institute found fewer than 2 in 5 millennials are saving for retirement.