As the cost of college in the U.S. continues to surge, many parents are resorting to drastic financial strategies—including pausing retirement contributions, liquidating investments, and taking second jobs—to spare their children from taking on student debt.
In a survey commissioned by Citizens Bank and conducted by Researchscape, 61% of parents said they need to go beyond traditional college financing options, such as 529 savings plans and federal loans, to bridge the financial gap. Of the 1,000 respondents surveyed, 19% reported taking on a second job, 30% had borrowed against their 401(k) or withdrawn personal funds, and 26% paused investing altogether. Some said they cut back on vacations or major purchases.
Meanwhile, 62% of parents said they expect to delay their retirement to help cover their children's college education costs.
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College Costs Are Surging
The Education Data Initiative reports that the average annual tuition at a public four-year college has risen 40 times since 1963. Between 2010 and 2023, tuition at four-year public universities jumped over 36%. Another EDI report estimates the average annual cost of college—including tuition, room and board, fees, and supplies—at about $38,000.
"Compared to just a few years ago, the pressure has increased due to rising tuition, inflation, and greater uncertainty around future costs," Tony Durkan, vice president and head of 529 college savings at Fidelity, told Fortune. "Many families are still underprepared, often relying on rough estimates rather than clear savings goals."
Emotional Decisions, Financial Consequences
Pam Krueger, investment advisor and founder of Wealthramp, told Fortune that she's seen a growing number of parents refinancing homes, pulling money from retirement, or juggling extra jobs to manage college expenses.
"It's coming from a place of love and a desire to protect their kids from the burden of student debt—but it's also very risky," Krueger said. "These choices can set parents back in a way that's really hard to recover from."
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Krueger added that many families make college decisions based on acceptance letters—not finances. Citizens Bank's survey results support this, showing that 20% of parents focused solely on getting their child into college without thinking about how to pay for it.
The topic also remains sensitive: nearly half of the parents surveyed said they'd rather talk to their child about drugs or alcohol than college costs.
Better Ways To Prepare
Durkan told Fortune that starting early with a 529 plan can provide significant long-term benefits. These tax-advantaged accounts allow for tuition savings and can be reassigned to other family members if unused.
"The earlier you begin saving, the more time your money has to grow through compounding," Durkan said. "Even small, regular contributions can add up significantly over time."
Krueger recommends open conversations with children—particularly in high school—about what's realistic, including considering schools with strong merit aid programs and transparent pricing.
"Sometimes the ‘big name' school isn't the best financial fit—and that's okay," Krueger told Fortune.
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Starting Late? Plan Strategically
College Planning Experts CEO Brian Safdari told Fortune that late-starting families should focus on applying for aid, reallocating investments, and estimating true out-of-pocket costs.
"Even private colleges with sticker prices over $95,000 per year may offer enough aid to cost less than a public school," Safdari said. But he also emphasized that gaps will likely remain.
"The expected cost minus savings minus free money will likely still leave a gap," Safdari said. "Once we have that number, we can start figuring out how to fund it over four years, while minimizing student debt and leaving enough money to retire."
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