A number of kids may be unhappy to learn that the Bank of Mom and Dad is closed, at least when it comes to funding a college education.
A new survey by Discover Student Loans found that the number of parents planning to help their child pay for college dropped slightly from 81 percent in 2013 to 77 percent this year. And nearly 1 in 3 parents now think their kid should foot most of the bill for their schooling, a slight increase from 2012.
Regardless of whether or not parents plan to contribute financially to their child’s college education, a whopping 96 percent of parents said they believe earning a college degree is still extremely important.
For parents who want to help pay for their kids’ schooling, many (3 out of 4) worry about having enough money to cover the cost of college. Even more parents (85 percent) are concerned that student loan debt will have negative impacts on their child’s future – affecting their ability to buy a home or car.
Interestingly, though college costs are a concern for parents, about half (48 percent) of parents said they don’t factor expense in when choosing a college. Danny Ray, president of Discover Student Loans, said it’s important that families consider their children’s long-term financial health.
“We hope that this annual survey brings to light the need for families to review all of their options when going to college. We encourage students to always use free money first when financing a college education and then, if needed, determine what lending options work best for their needs.”
Another survey finding: About half of parents said their child plans to take out loans to pay for college.
When it comes to repaying those student loans, about half (52 percent) of parents said they plan to help their children with their loan payments. That’s a slight drop from 58 percent in 2013.
“As students prepare to enter college this fall, it’s important for parents to have clear and honest discussions with their children about how they’ll pay for college,” Ray said. “Students need to understand the financial responsibilities they take on and, more importantly, who is responsible for repayment of loans upon graduation.”
When I was a high school senior looking at attending college, I ultimately selected a university I could afford. I took out student loans to pay for nearly all of my college education. I also had a few scholarships that helped offset some of the costs. My folks pitched in and paid for my first semester of school.
I’ve been making student loan payments for what seems like forever. Not once have I ever considered having my parents help pay for them. When times were tough, I took out an economic hardship deferment.
Frankly, I’m surprised that so many parents are planning to help their students pay for college and maybe even their student loans, but that they don’t factor cost in when selecting a college.
Do you plan on helping to pay for your child’s college education? How much do you plan to contribute? Share your thoughts below or on our Facebook page.