More find college costs out of reach

More than one-third of U.S. parents have decreased or stopped saving for their children’s college education because of the economic decline, according to a survey by Fidelity Investments.

Rising daily household expenses and a decline in home equity mean that parents can afford to pay only 21% of future college expenses, compared with 24% a year earlier, based on the survey of about 3,000 adults released Wednesday.

Total estimated college expenses for current high school seniors at a four-year public or private school will be $120,000 on average beginning in 2009, Fidelity said, using data from the College Board.

Almost 60% of parents have started saving for future expenses, and 30% said they were investing in a dedicated account such as a so-called 529 plan, which allows tax-deferred savings for qualified education expenses and are sponsored by states or educational institutions. Fidelity, based in Boston, manages more than 980,000 accounts in seven state-sponsored 529 plans.