08/30/2013 06:44 pm ET | Updated Oct 30, 2013

Are Parents Flunking College Financial Planning?

As news of rising college costs and increasing student loan interest rates swirl about, you may be one of the few people relaxing and patting yourself on the back. You're not worried about these changes because you were smart enough to actually save for your child's college education. But do you really have things as under control as you think?

According to the latest annual college savings survey from Fidelity Investments, you may be in for quite a surprise. While most parents think they have saved enough money to pay for about 62% of college costs, the Fidelity study revealed that they are on track to cover only 34% of that savings goal. This could be due to poor interest rates on savings, bad financial planning, unexpected increases in room and board expenses or lack of knowledge about true college costs. Whatever the reason, many parents and students will be caught short and will have to scramble to make up for the difference.

Over half of the respondents are concerned that their children might have to make some compromises in the quality of their college experience. Students might be encouraged to take more online courses or choose a school closer to home so they can commute. Some may choose a public university over a preferred private school, or may have to compromise on participating in a travel abroad experience. Others might need to take additional courses each semester or attend summer school in order to graduate on time. This can place additional stress on students, and might affect their ability to grow and learn as fully as might have been hoped.

While more parents are aware of the need to start saving earlier and saving more, far too many claim it just isn't possible to make the grade. That's when they turn to other strategies to help make up for the difference in what they were not able to save themselves. This may have to come in the form of scholarships and grants, work-study programs and student loan debt. Once they have exhausted all of these options some parents and students are even turning to credit card debt as a last resort; however, this can saddle the student and any co-signers with a huge amount of debt for many years to come.

Don't flunk out when it comes to saving for college. Learn about the true costs, honestly assess your financial situation, get professional insights earlier rather than later, and your child should have a clearer path to college success.