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Financial Literacy - College funding
National poll results
More than half of parents say they can't afford college, but they'll postpone their retirement to help finance it.
Smart ways to pay for college

Half of families can't afford college

Competing priorities and rising college costs are forcing parents' hands to either play the selfless martyr or live up to their "Me Generation" label. Regardless of which role they choose, it's evident they can no longer afford the cost of putting their children through college.

When asked to self-report, fewer than half of parents (47 percent) feel they can afford to send their kids to school, but a full 78 percent are willing to make at least one major sacrifice in order to do so. For many, this means shortchanging their retirements.

Bankrate commissioned GfK Roper to conduct a random survey of parents' college funding plans as part of our yearlong Financial Literacy series. Parents with children younger than 18 were polled. The first question reveals a full 86 percent of parents expect their children to go to college, which shows a continuation of the upward trend of enrollment. Two-thirds of all high school graduates currently enroll in college, up from one-half a generation ago in 1975. According to statistics from the U.S. Department of Education, enrollment increased by 17 percent between 1984 and 1994 and jumped another 21 percent between 1994 and 2004.

All subsequent questions were asked only of those who expect their kids to go to college.

Can you afford sending your child to college?

As college attendance becomes the rule rather than the exception, the burden is not surprisingly heaviest on lower-income families. "Parents with incomes below $40,000 were much more likely to say they couldn't afford college compared to those with higher incomes. The unsettling aspect of this poll is that in all likelihood, these parents' perceptions mirror reality," says Tamara Draut, author of "Strapped: Why America's 20- and 30-Somethings Can't Get Ahead." "College costs have soared with the average tuition at a public four-year university, increasing more than 35 percent in the last five years and having more than doubled in the last two decades, after adjusting for inflation."

Higher prices are hitting everyone hard, regardless of income level. Bankrate senior analyst Greg McBride points out that even though nearly half of parents can afford the costs, that number is an average calculated from what he calls a "heavy skew of the survey toward higher-income households." Only 28 percent of parents with household incomes less than $50,000 can afford college, but even among higher-income groups, only 65 percent of parents say they can afford their children's education.

-- Posted: Sept. 17, 2007
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