College

Leaving the Nest Egg: Paying for College with Retirement Funds

by Robyn | September 2nd, 2010 | View Comments

Paying for college is a stressful and enormous task for many families. So enormous in fact that some parents are cracking open their nest eggs to pay for their child’s education.

About 6% of parents dipped into their 401(k) or IRA for their child’s college expenses in 2010, according to a Sallie Mae and Gallup survey of 801 college students age 18 to 24 and 823 parents of college students. Parents are not only withdrawing money, but they’re withdrawing more money year over year.  A $5,318 dip did the trick in 2009, but $8,554 was needed in 2010.

For additional context, here is a breakdown of how families are paying for college today.

Read full survey details at SallieMae.com.

Would you consider using retirement funds to pay for your child’s college education? Does this pie chart seem about right to you?

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  • http://www.overturemarketplace.com Jeff S

    Very interesting stats! Parents, keep in mind that while these are averages, the actual stats for many families do vary greatly. Just be sure to maximize your use of savings and the grants & scholarships available to you before using student loans that will require you to repay interest upon the student’s graduation. And if you do need loans, make sure to shop around for the best possible rates. Good luck!

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