Sallie Mae’s annual How America Saves for College report shows that almost 2/3 of parents are saving for college, and 1/3 saved more this year than last year. That’s great news. The report also had some other interesting findings:

• Savings is covering less of the cost of college than parents anticipate, and students are borrowing more than they intended to. Overall, parents predict that their savings will cover 29% of the cost of college. Families with students enrolled in college report, by contrast, that savings covers 10% of the cost of college.

• With savings covering less, what is making up the difference? Families expect student loans to cover 13% of the cost; the actual share reported is 19%. Additionally, parents expect to pay for 10% out of income; the actual percent reported is 13%.

• The most commonly-used savings tool is a general savings account, with 45% of savers reporting that they use that tool. 29% of savers use 529 plans; however, those funds hold the largest share of assets, with 30% of total savings.

• Almost 1/3 families are using savings vehicles that do not keep pace with college cost inflation: checking accounts and CDs. If that’s you, transfer those savings over to a 529 account. Besides the likely higher return, you may be eligible for a tax deduction that can be added to your savings.

• The average age of a child at which parents begin to save is 7. That’s absolutely understandable from a financial perspective– assuming two children in the family, that’s probably when daycare expenses dropped dramatically. However, missing out on 7 years of compound growth puts families behind on this big expense. Even modest savings in the early years can add up to big dollars later: a family that contributed $100 per year for those first seven years would have almost $1,000 saved by the time the child turns 7, and that amount might double again before college begins.

• While 59% of parents expect to share the cost of college with their children, less than half have discussed this with their children. According to the study, “Parents discuss the importance of earning scholarships with their children more than any other topic (69%). Two-thirds of parents (67%) have discussed the price of college. Topics that focus on the student’s direct contributions through working (47%), loans (49%), or use of their own savings (31%) are discussed less frequently.”

• In addition, among families expecting children to contribute to the cost of college, only 19% of those children are contributing to their college fund. Students who are saving for college and not contributing to their 529 account are harming themselves in aid formulas, too: their own savings are assessed at 50%, compared with 5.6% for money contributed to a parent-owned 529.

• 77% of parents say that minimizing the cost of college is important to them; however, 1/3 of parents have not discussed with their children how they might minimize the cost despite the fact that the student’s decisions are the primary driver of college costs.