Parents’ top worry: college, not retirement

NEW YORK — All those reports about the rising cost of a college education appear to be having an impact on the savings patterns of American families.

A survey finds that parents with children under age 18 are more concerned about saving for their children’s educations than they are about saving for retirement.

The study was commissioned by The Vanguard Group mutual fund company, which is based in Valley Forge, Pa., and Upromise Investments Inc. of Needham, Mass., which channels shopping rebates into educational savings accounts.

The survey found that 37 percent of the more than 1,100 parents who were interviewed said saving for college was of primary concern, compared with 34 percent who said retirement was their top financial concern. The rest said that saving for a house, car or other major purchase was most important.

Interestingly, more families with children under age 12 were saving for college — 64 percent — compared with families with children aged 12 to 17, where the rate was 59 percent, the study found. And 30 percent of families with younger children said that grandparents and other relatives were helping them to save, compared with 25 percent of families with older children.

John Heywood, a principal of Vanguard’s education markets group, said he suspected parents were motivated by surging college costs.

“I believe people are recognizing the increasing costs of college and starting to save earlier,” Heywood said.

The cost of sending children to college has been rising fast in recent years. According to the latest survey from the College Board, a nonprofit association based in Washington, D.C., tuition and fees at four-year private institutions rose nearly 6 percent to $21,235 for the 2005-2006 academic year from $20,045 in 2004-2005, while costs at four-year public institutions went up more than 7 percent to $5,491.