A study released Aug. 29 by Fidelity Investments found many parents don’t think about the full cost of their children’s college plans, and many are not realistic about how much their children will earn upon graduation.
The sixth annual College Savings Indicator study found only 31% of parents of college-bound children have considered the total cost of college in terms of graduating with debt, school selection, major selection, and post-graduate earning potential.
Of the parents who are adequately addressing all college costs, 61% are working to change college plans or manage post-graduation debt. Nearly four in 10 of those families are choosing more affordable colleges; 28% are applying for more financial aid, and 16% are asking children to change majors to increase earning potential.
Earning potential is something many parents seem to be unaware of, the study found. While 42% of parents encouraged their children to major in a field seen as high-paying – primarily computer science, nursing, engineering, psychology, biology, or accounting – the disconnect in what parents believe their children will earn and what their children will likely earn is profound. The study found that while parents who encouraged a specific major choice believed their child would earn $70,300 upon graduation, the average starting salary for the class of 2012 was actually only $44,442.
Still, 78% of parents are “optimistic” that their children will secure a job in their desired field within six months of graduation, and 23% believe their children will find a job before they graduate.
Follow Anna Schumann on Twitter at @ASchumannCMN.