An increasing number of families are saving for their kids’college education, but many are likely not saving nearly enough, according to FidelityInvestments’ latest College Savings IQ survey of almost 2,000parents nationwide.

A record 72% have opened college savings accounts, but manyfamilies are underestimating the cost of college.

Parents of high schoolers, for example, are expecting afour-year nonprofit private college education will cost $145,000 onaverage when the projected sticker price is close to $220,000. Ofcourse, not all families will pay the sticker price.

“The good news is the percentage of parents saving for collegeare at a record high 72%, 59% are saving regularly and anincreasing number are using dedicated savings vehicles like 529,”said Ron Hazel, senior director of Fidelity Advisor 529 andindividual retirement products. “The not-so-good news is that asignificant number are underestimating what college will cost.”

Almost half the parents saving for college are using 529 collegesavings plans, which have several tax advantages. Earnings grow taxfree and distributions are tax-free so long as the funds are usedfor qualified educational expenses such as tuition and fees. Inaddition, some states allow tax-deductible contributions to 529plans, even for plans based out of state.

Parents saving for college with a 529 plan reported an averagebalance of $32,000 saved, almost 50% more than parents savingwithout a 529 plan. Parents working with a financial advisor alsoreported saving more for college than those who didn’t have anadvisor — $14,000 more, according to the Fidelity survey.

The firm itself said it has seen a 34% increase in openings forits 529 college savings plan accounts through the first half of2017 compared to the same time frame last year. (Fidelity sponsorsfive 529 plans — four direct-sold and one sold throughadvisors.)

Many parents who have set up 529 plans, however, don’t have aclear understanding of plan fundamentals, said Hazel. Many don’tknow that 529 savings can be used to pay for more than just tuitionand fees — they can be used to pay for books and room andboard, for example — or that a beneficiary can be changed atany time and investments within a plan can also be changed.

More important, many parents — 44% in the Fidelitysurvey — believe that savings, including those in a 529 plan,will significantly reduce the chances of their student receivingfinancial aid. The impact, however, is often minimal. Assets heldin a 529 plan owned by a dependent student or his or her parents,for example, have a weighting of just 5.64% in the Expected FamilyContribution calculation used in the Free Application for FederalStudent Aid (FAFSA).

The survey found that parents expect to cover 51% of theirchildren's college costs with savings and loans with the remaindersplit between scholarships and loans their children take out.Thirty-seven percent of parents of high schoolers and 68% ofparents of preschoolers and younger children reported that they'restill paying off their student loans.

The average family income of parents participating in theFidelity survey is $103,000, including $118,000 average for thoseworking with an advisor and $92,000 for those who aren't.