According to a Discover Student Loans survey, most parents are worried about the long-term impact of students loan debt. The survey included 1,000 adults with children 16-18 years old who are planning to attend college and was conducted by Rasmussen Reports, an independent survey research firm.
A press release from The Wall Street Journal’s Market Watch reveals parents’ answers to questions concerning how their children will pay for their college tuition.
- 96% of parents see the value of a college education
- 48% of parents say that the cost of the college would not be a factor in choosing a college
- 77% said they would help their child pay for college
- three out of four families are worried about not having enough money
- 53% of parents said their child’s major and earning potential played no part in their decision to fund their child’s education
- 15% said their child should pay for all of their college education
- 32% said their child should pay for most of their college education
- 52% said they would assist their child in repayment of their student loans
- 52% said their child would be using student loans to pay for college
44% of parents find college financial offices the most trusted resource for information
Although 77% of parents said that they were willing to help their child pay for college compared to 81% who felt that way last year. says Michelle Smith of Money News, the number of parents who said their children should pay for all of their college education has increased in the past three years.
College students who have debt after they graduate number 70% and the average debt is about $30,000, according to CNBC. Further increases are likely in the future since there is legislation in place that ties interest rates to the performance of the financial markets.
“Federal student loan rates will continue to increase in the next few years and will likely hit the maximum rate caps which are as high as 10.5 percent for some loans,” Mark Kantrowitz, senior vice president and publisher of Edvisors.com, told CNBC.
Only 52% of parents say they will assist their children in repaying their student loans, down from 58% who said they were likely to help in 2013. Why the lack of parental participation? Parents are worried about their own finances.
At the same time, 85% of parents are worried that student loan debt will limit their children’s ability to buy a home or car after graduation says Kate Rogers, writer for Fox Business.
The numbers speak for themselves as far as education and earning potential,” says Danny Ray, president of Discover Student Loans. “Eighty percent of college graduates make more than people who just have a high school diploma. The unemployment rate is 8.1% for a high school graduate versus 3.7% for those with a college degree. There’s clearly value in getting a college education.”
Ray, who has a high school senior himself, says he can understand why parents do not want to limit their children’s options.
He does suggest that the family sit down early on and become familiar with the financial implications of attending the college of your child’s choice. He adds that it is important to spend ample time searching for “free money”. Sometimes a private loan is less expensive than a federal loan. Putting in the time will make all the difference, according to Ray.