Parents Are Saving More for College. That Doesn’t Mean They Have a College Plan.
Fidelity’s new 2026 research reveals an opportunity for financial advisors to move the conversation from “how much are you saving?” to “what are you actually investing in?”
There is some encouraging news about college planning.
According to Fidelity Investments’ newly released 2026 College Savings Indicator, more parents than ever are saving for their children’s education. A record 84% of parents surveyed have started saving for college, compared with 74% in 2024. Forty-one percent now expect to pay the entire cost of their child’s college education. And parents report putting away approximately $9,000 per year, on average, toward college.
For financial advisors, those numbers should be encouraging. But another number in the study should generate a very different conversation:
Only 44% of parents who are saving and intend to pay at least some college costs are currently on track to achieve their goal. Parents hope to pay approximately 72% of their child’s education costs. They’re currently on track to fund only about 53% of that goal.
That gap represents an important opportunity for financial advisors. Because perhaps the question isn’t simply: “Are my clients saving enough for college?” Perhaps we also need to ask: “Do they know what they’re saving for?”
529 Plans Are Working
One of the strongest findings in Fidelity’s research concerns 529 plans. Nearly 45% of families surveyed now have a 529, up from 39% in 2024.
Even more interesting is the difference in accumulated savings. Families with a 529 reported average college savings of approximately $45,752, compared with $24,387 among families without one. That’s nearly twice as much.
Fidelity also found that parents using 529 plans are more likely to have a financial plan in place for achieving their college goals. That’s a powerful endorsement of the work financial advisors are already doing. Getting families to start early, save consistently, and use tax-advantaged vehicles can make an enormous difference.
But accumulating the money is only one side of the college-planning equation.
What Are We Actually Saving For?
Imagine a client comes to you and says: “We have $200,000 saved for our daughter’s college education.”
That’s useful information. But it doesn’t tell us whether $200,000 is enough. Or whether spending $200,000 is necessary. We need to know more.
- What does the student want to do?
- What careers align with her interests, aptitudes, and abilities?
- What education does that career actually require?
- Which colleges provide strong pathways toward that career?
- Where is she likely to receive merit aid?
- What will those colleges actually cost this particular family?
- And perhaps most importantly: What outcome are we expecting from this education investment?
Until families can begin answering those questions, determining the “right” amount to save becomes surprisingly difficult.
Fidelity’s AI Finding May Be the Most Important Number in the Study
Buried deeper in Fidelity’s research is a statistic financial advisors should pay particular attention to. Seventy-three percent of parents believe artificial intelligence will influence which major their child chooses. Nearly half – 49% – believe AI will make some jobs obsolete or harder to obtain. Another 32% believe AI will create additional employment opportunities.
Think about the implication. Parents are simultaneously saying: “We’re willing to spend more on our child’s education” and “We’re increasingly uncertain about what careers will exist when our child graduates.”
That is an investment-planning problem. If college is potentially one of the largest expenditures a family will make outside of buying a home, then career uncertainty should make families more strategic about education decisions – not less.
College Planning and College Saving Need to Converge
Traditionally, two conversations have happened separately. The financial advisor asks: “How much should we save for college?” The admissions conversation asks: “Where can the student get accepted?”
But families increasingly need a third conversation connecting the two: Which education provides the best combination of career fit, college fit, and financial fit for this student?
That’s where Return on Education becomes important. ROI asks what happened financially. Return on Education asks something broader:
- Did this educational investment help the student reach an appropriate career?
- Did the student graduate?
- Was graduate school necessary?
- How much did the entire education pathway cost?
- How much debt was required?
- And were there alternative pathways that could have produced a similar or better outcome for considerably less money?
Those questions should be asked before the family commits to a college, not after graduation.
Student Debt Is Driving Parents’ Decisions
Fidelity’s research provides another clue about why parents are increasingly willing to shoulder more college costs themselves. Among parents with student-debt experience, 88% said their own debt motivates them to save more for their children. More than half said their student loans delayed retirement saving, while 48% said their debt interfered with their ability to save for their own children’s education.
That’s a generational financial-planning lesson playing out in real time. Parents don’t simply want their children to attend college. They want them to begin adulthood without the financial burden they experienced themselves.
But avoiding unnecessary debt isn’t accomplished only by accumulating more money. It can also be accomplished by making better education purchasing decisions.
Three Questions to Ask Clients With College-Bound Children
The Fidelity study gives advisors a natural reason to revisit college planning with clients. Consider adding these three questions to your next review:
1. How much of your child’s education do you intend to pay for?
Fidelity’s research suggests parents are increasingly willing to shoulder more of the cost. Make that expectation explicit and incorporate it into the family’s broader financial plan.
2. Are you on track for that goal?
There may be a meaningful difference between what parents hope to provide and what their current savings trajectory will actually support.
3. What are you expecting that education investment to accomplish?
This may be the most important question. If a family expects to invest $100,000, $200,000, or $300,000 in a child’s education, understanding the student’s career direction and likely education pathway should be part of the planning process.
The Opportunity for Financial Advisors
Financial advisors don’t need to become college admissions counselors. And college advisors shouldn’t try to replace financial advisors. The opportunity is to connect the two disciplines.
The financial advisor can help answer: “What can this family responsibly invest in education without compromising their other financial goals?” A comprehensive career and college planning process – like the one offered by Pathfinders Advisors – can help answer: “Where should they invest it?”
When those conversations happen together, and early, families can make dramatically more informed decisions.
Fidelity’s latest research shows that American parents are taking college savings seriously. And that’s excellent news. Now we need to help them take the college investment decision just as seriously. Because having a well-funded 529 is a tremendous accomplishment. Knowing how to spend it wisely may be even more important.
Read the Research
Fidelity Investments released its 2026 College Savings Indicator on August 26, 2026. The study surveyed 2,081 families nationwide with children age 18 and younger who are expected to attend college.
About Pathfinders College & Career Advisors
Pathfinders Advisors helps families connect career exploration, college selection, and education investment strategy – so students can pursue the right path while families make smarter decisions about one of the largest investments they may ever make. Schedule a complimentary strategy call to learn how we can help your family navigate the college planning process with confidence.
Career First. College Second. Helping families think differently about the Return on Education.
