Three-fourths of parents plan to help their child pay for college. This is down from 81 percent last year.
There’s good news and bad news for Millennials about paying for college, according to a Discover Student Loans survey. First the good: Three-fourths of parents plan to help their child pay for college. Now the bad: This is down from 81 percent last year.
Nearly all surveyed parents (96 percent) believe there is value in a college education, 85 percent are very or somewhat worried that student loan debt will affect their child’s ability to purchase a car, home, or other large purchase after college, the study finds.
On the one hand, nearly half of parents (48 percent) said that the cost would not be a factor when choosing a college, an 8 percent increase from last year. On the other, parents “routinely said they are worried about having enough money,” Discover reported. Just over four-in-ten (44 percent) said they were planning to limit their college choices based on price.
According to the College Board, the average cost of tuition and fees for the 2013–2014 school year was $30,094 at private colleges, $8,893 for state residents at public colleges, and $22,203 for out-of-state residents attending public universities.
Average student loan debt is just south of $30,000. More than seven-in-ten college graduates carry student debt with them as they begin life after college, according to the Institute for College Access and Success. And as Sharon Epperson reports in a CNBC blog post, the interest rate of federal Stafford loans will go from its current fixed rate of just under 4 percent to 4.66 percent of loans that are distributed between July 1 and June 30, 2014.
Three-fourths of families surveyed said they are very or somewhat concerned about having enough money to cover college costs, the Discover report found. But they are not limiting their financial support based on what course of study their child pursues. Fifty-three percent said major and earning potential played a part in their decision to fund their education. One-third of parents do plan to limit funding based on their child’s preferred course of study.
The percentage of parents who believe their child should pay for college has increased somewhat, from 15 percent in 2014 compared to 12 percent in 2012. Almost one-third (32 percent) think their child should pay for most of their higher education, compared to 27 percent two years ago.
“It is promising to see families recognize the investment in a college education and are considering their children’s long-term financial health beyond graduation,” Danny Ray, president of Discover Student Loans, said in a statement.
Millennials with parents wavering in their financial support of their college education should be sure to stay on their grandparents’ good side. Thirty-nine percent of senior Millionaires over the age of 65 consider financing their grandchildren’s education one of their primary concerns, according to a 2014 Spectrem’s Millionaire Corner wealth level study. Previous Millionaire Corner research found that half of seniors surveyed were shouldering all college costs, while 20 percent reported footing more than three-fourths of the bill.
Related story: Few parents start saving for college before child’s birth
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.