The average undergraduate in the US is paying approximately $19,000 per year at a public four-year in-state university and $33,000 at out-of-state universities, according to the College Board — and parents are increasingly footing the bill after college, too.
The results of a survey released this week suggest that undergraduates’ parents are the ones who more often shouldering the burden of higher education. The poll of prospective college students and their parents, written and administered by Sallie Mae’s savings plan Upromise, found that for parents and students, cost was the biggest stress factor surrounding the beginning of their children’s college careers, reports Nick Morrison of Forbes.
The survey showed that the proportion of parents who felt they would be supporting their children for up to two years after graduation was double the number of last year’s parents, up to 36% from 18% in 2014. Those parents who expected to be supporting their graduates for up to five years after they completed school more than tripled, 5% to 17%.
This could be based on a lack of confidence in the job market for graduates. One in five parents participating in the poll believes it will take their child a year to find a job in his or her field of study, and one in ten expects the job search will take more than two years.
This is certainly not what students had in mind when they flew the nest, and few will relish the fact that they must rely on their parents for several years after they graduate. The big picture is that students and their parents will have significant debt after the graduation ceremonies are over and face the prospect of a long job search, or possibly not finding a job at all.
The conundrum is that college is a ticket into many jobs, but tuition fees continue to increase, so parents have to budget not only for college itself, but also for supporting their children during what could be a long job-search after a completed education. The survey did find that 70% of parents would allow their child to move back in rent-free, but half of the students polled say they would be willing to pay their parents rent.
Erin Condon, president of Upromise by Sallie Mae says, “We were pleasantly surprised that parents and students were very aligned in their expectations. One could argue that this generation is entitled or spoiled, but you could always argue that they are financially responsible and not biting off more than they can chew by making effort to get off on the right foot to make sure that long-term success is there.”
A Upromise by Sallie Mae press release explains that Upromise is free and easy to join, and offers families cash back college savings on purchases from over 850 retailers like BestBuy, Macy’s. WalMart, and Lands End. Members have earned collectively $900 million in cash-back rewards since the program began.
Upromise suggests that as soon as possible families open a savings account into which gifts from friends and family can be deposited. Also, families should sign up for free services to receive cash back rewards. Then, set a a goal and get into the routine of adding money or making automatic deposits.
Earlier research has shown that 50% of college graduates are receiving help from their parents even though half of these graduates have full-time jobs, says Arizona Pathways to Life Success for University Students, a study carried out by Joyce Serido, an assistant research professor at the University of Arizona. Serido has tracked 2,000 students nationwide since they were college freshmen in 2008, writes MarketWatch’s Quentin Fottrell.
The study showed that 28% of graduates say that marriage is not a priority life goal, and 19% say the same thing about owning a home. College graduates continue to struggle through an overall unemployment rate of 5.4% in April, lower than the 6.2% in April 2014. The effective unemployment rate for 18 to 29 year-olds was 13.8% in April according to Generation Opportunity, a conservative nonprofit think tank based in Arlington, Virginia.