On the heels of last week’s college-funding article that drew a great and helpful response from SMI readers, T. Rowe Price published the results of a new survey on the same topic. The research, among 2,000 parents who have a retirement account and have kids ages 15 and younger, provided a less than hopeful view of how today’s parents are planning to cover the cost of college.

Below are some of the survey’s key findings, followed by my responses.

Half are willing to work more to pay for their kids’ college: 49% agreed with the statement “I’d be willing to delay my retirement to pay for my kids’ college education.” And 51% agreed with the statement “I’d be willing to get a second or part-time job to pay for my kids’ college education.”

The major concern with the first point is that people may not be able to delay their retirement. As we’ve written before, many of today’s workers are planning to work past the traditional retirement age, and yet the reality is that very few of today’s retirees did so. Many could not work as long as they wanted to because of health issues.

The second point may be an area of opportunity. I know of at least one family in which the mom purposely stepped out of the paid work force when her kids were born, but then reentered the paid workforce when they neared college age and kept working throughout their college careers. Her job enabled their family to pay for college from cash flow.

Tapping retirement savings is preferable to letting kids take on student debt: 53% of parents agreed with the statement “I would rather dip into my retirement savings to pay for my kids’ college education than have them take on student loans.”

Not a good idea. There are far more options for paying for college than there are for paying for retirement.

Some are willing to take on considerable college debt: 52% of respondents are willing to take on $25,000 or more in debt to pay for their kids’ college education, with 23% willing to take on over $75,000 and 9% saying they would borrow “whatever it takes.”

Once again, not a good idea. With more people age 65 and older carrying mortgages into their later years than in the past, taking on a loan to pay for your kids’ college just makes it that much harder to fund retirement.

Student loans have impacted retirement savings: 44% of the parents who used student loans to pay for their own college said that their payments have impacted their ability to save for retirement.

No doubt. The best time to start saving for our later years is when we’re young. Having student loans to pay off makes it virtually impossible to get a jump on retirement savings.

Using the wrong accounts for college: 45% of parents who are saving for their kids’ college indicated that they are using a regular savings account to do so. And while 31% said that they are using a 529 account, nearly as many (30%) said they are using their 401(k)s to save for their kids’ college.

I’m surprised the usage of 529 plans is so low (28% of respondents said they didn’t know what a 529 plan is), and there was no mention of Coverdell accounts. We started funding a 529 plan account for each of our three kids when they were babies. If I had to do it over again, I would have used—and still may use—a Coverdell account as well. While the limits on how much you can put in a Coverdell each year are far more restrictive than with a 529 plan, you can use the money for qualified K-12 expenses, such as private school tuition, in addition to college costs. Our kids go to public schools, but Coverdell money can also be used to purchase computers and other supplies.

As for using a 401(k) to save for college? In a word, don't. These folks must be planning to cash out a portion of their retirement savings or borrow against it. Cashing out will come with a 10% penalty if they’re younger than 59 and a half and taxes. Borrowing against a 401(k) isn’t a good idea because doing so would likely jeopardize the parents’ retirement. Plus, if they part ways with their employer, they’ll typically have to repay the loan within 60-90 days.

To summarize, the only bright spot I saw in the survey was the willingness among parents to take an additional job to help pay for college. Especially if one parent has been home full-time while raising kids, if that parent entered the paid workforce when their kids went to college, that might be a viable way to cover college costs.

What are your responses to this survey?