As the cost of living continues to rise and inflation stretches family budgets to their limits, many parents are struggling to save for their children’s future education. For households supported by two incomes, the expectation might be that saving for college would be more attainable. However, the reality facing millions of American families is quite different. Despite working long hours and pooling their financial resources, many two-income families are finding that just covering basic living expenses such as housing, groceries, insurance, and utilities leaves little to nothing left over to save for college.
The challenge of saving for higher education is not new, but in today’s economic environment, it is growing more difficult. Inflation has driven up the price of nearly every essential good and service. Health insurance premiums continue to rise year after year. Homeowner and auto insurance rates are also climbing at double-digit rates in some states, and property taxes are taking an increasing bite out of household incomes. At the same time, grocery prices have risen dramatically, leaving families paying significantly more for basic staples than they did even a few years ago. While wages for some have increased, many families find that their income gains are quickly consumed by these growing costs, leaving little room for discretionary spending or savings.
College tuition costs, meanwhile, continue to rise well above the pace of inflation. According to recent data, the average cost of tuition and fees for a four-year public university for in-state students is now over $10,000 per year, and that figure does not include housing, books, or other expenses. For private universities, the costs are even higher, often exceeding $40,000 per year. While financial aid and scholarships are available, they are not guaranteed and often do not cover the full cost of attendance.
Faced with these realities, families are left wondering what, if anything, they can do to ensure their children are not burdened with overwhelming student loan debt or left to fend for themselves financially when pursuing higher education.
One step families can take is to prioritize a savings plan, even if contributions are small. Opening a 529 college savings plan is one option that offers tax advantages for education savings. Even modest, consistent contributions to a 529 plan over time can grow, thanks to compound interest, and provide some cushion against future college costs. Parents may also consider automating their savings, so that a set amount is deposited into an education fund each month before other expenses are paid. This method, though difficult, can help build savings gradually.
Cutting costs in other areas may also be necessary, though this is increasingly challenging as inflation affects nearly all aspects of daily life. Some families are exploring alternative ways to reduce expenses, such as downsizing homes, driving older vehicles, or cutting back on non-essential spending. Others are turning to side jobs or freelance work to supplement income, though this comes at the expense of limited free time and increased stress.
Another practical approach may involve involving children in the process early. By encouraging children to apply for scholarships, grants, and work-study programs, families can help reduce the overall amount that will need to be borrowed or saved. High school students can also consider dual enrollment or Advanced Placement (AP) courses, which can give them a head start on college credits at a reduced cost, potentially shortening the time and money needed to complete a degree.
Some families are exploring alternative educational paths altogether. Community colleges, trade schools, and certificate programs offer more affordable options for students to gain valuable skills without incurring as much debt. For many career paths, especially in trades, technology, and healthcare, these alternative programs can lead to well-paying jobs without the need for a traditional four-year degree.
However, despite these efforts, the question remains whether the era of parents fully funding their children’s education is coming to an end for the middle class. In the past, many parents were able to work, save, and support their children through college without the children needing to take on significant debt. Today, it is becoming more common for students to work while attending school, take out loans, and contribute substantially to their own education costs.
This shift may reflect a broader change in how American families approach higher education. It is increasingly seen as a joint effort between parents and children, rather than solely the parents’ responsibility. Some argue that this model teaches students valuable lessons about responsibility and the value of money. Others worry that starting adult life with substantial debt will hinder the next generation’s ability to build wealth, buy homes, and save for their own futures.
While saving for college on a two-income household is more difficult than ever due to inflation and rising costs, it is not entirely impossible. Families may need to adopt a mix of creative strategies, disciplined saving, and realistic expectations about what is affordable. Although the days of fully funding a college education without any financial hardship may be slipping away for many families, with planning and effort, it is still possible to provide some level of support to ensure children are not entirely left to struggle on their own.
