College is more expensive than ever, yet a growing number of parents say they’re willing to foot the entire bill to spare their kids student debt—and give them a financial head start.
Some 41% of U.S. families plan to cover the entire cost of their child’s higher education, a Fidelity Investments survey of more than 2,000 families published Wednesday found. That’s up from 37% in 2024, the last time the financial services firm conducted its biennial College Savings Indicator study.
“The ones that are not saddled with student loan debt, they’re ahead,” said David Hall, a 39-year-old financial planner, who’s trying to save enough to pay for all four of his kids’ college educations. His own $72,000 in student debt helped keep him at an old job for longer than he wanted and he doesn’t want that for his children.
He has 529 plans for each of them, who range in age from two months to nine years. His goal is to save the equivalent of $180,000 to $200,000 in today’s dollars for each child, adjusting the target as future college costs rise. He wants his kids to graduate debt-free so they can start saving and investing right away.
Rising tuition and the burden of student debt have helped sour Americans on the value of higher education. Just 22% say a four-year degree is worth the cost, even if a student has to borrow to pay for it, according to a 2024 Pew Research Center survey. Nearly half say college is worth it only if loans aren’t necessary.
Meanwhile, struggling borrowers are facing a less forgiving repayment system. The Trump administration has resumed collections on defaulted federal loans and moved to unwind several income-based repayment options, just as more borrowers are struggling to keep up. In June, nearly 9.2 million Americans were more than a year behind on their student loan payments, up from 6 million in August 2025.
“There can be some thought around college not really being worth it and parents not really seeing the value of it,” said Cory Latham, managing director of 529 college savings at Fidelity Investments. But he says they do and that, in his view, many parents see taking out loans as the issue. “They’ll say, I don’t want my child to graduate with all that debt and I don’t want them to have that burden,” he said.
Many parents say saving for their child’s education is their top financial goal, the Fidelity survey found—at 74%, it’s ahead of both saving for retirement and for an emergency.
From their own experiences, many know how much student-loan bills can stymie finances. The average retirement account balance is 20% lower for Americans between the ages of 18 and 49 with student debt than it is for those without, according to Fidelity data from February.
Federal student loans are also becoming a less generous backstop for families trying to cover the soaring cost of college. New borrowing limits that took effect July 1 cap Parent PLUS loans at $20,000 a year per child, ending parents’ ability to borrow up to the full cost of attendance. Families who still face a gap may have to turn to private lenders, where rates depend more heavily on a borrower’s credit and repayment terms can be less flexible.
“It’s not an unlimited check anymore—a blank check for what you can borrow for your kid’s college,” said Keith Wayne, a certified financial planner at Mercer Advisors, who specializes in college planning and student loans. “Families have been able to have their kids go kind of wherever, and that’s just not as true right now as it was.”
Tony Zhang, 35, works two side hustles in addition to a full-time job in supply-chain management, with the goal of fully funding his 8-year-old daughter’s college education. He has a 529 savings plan for her and uses interest earned on his high-yield savings account to fund her custodial brokerage account. He also plans to set her up with a stock portfolio and help her with a down payment on a house.
“You bring your child into this world: It’s your goal to give them the best head start in life,” he said. His own parents helped pay for his college, an advantage he appreciates more now. “I didn’t really think about it at the time, but now that I’m an adult and look back, wow, it helped me a lot. It was great not having debt.”
This article was provided by Bloomberg News.