For all the public questioning of the value of college, more parents of teenagers are convinced it’s a good bet, although they are worried about scraping together the cash to make it.
Nearly nine in 10 parents said college was very important to their children’s futures, a new survey shows, up from about eight in 10 last year. And the shares of parents who thought a college education was somewhat or not important dropped slightly, according to the survey, which was released on Thursday by Discover Financial Services.
Of course, footing the bill caused concern: 79 percent of parents said they were worried about having enough money, compared with 75 percent last year. At the same time, more parents were planning to contribute to their children’s educations: 81 percent this year, compared with 74 percent last year.
To come up with the money, roughly equal proportions of parents said they would turn primarily to family savings (27 percent) and primarily to student loans (29 percent). Only 11 percent said the money would come mostly from 529 savings plans, reflecting persistent lags in the use of such college-savings accounts.
Nearly half of parents (48 percent) believed their children should pay for some of their college educations; 42 percent of parents said the kids should shoulder most or all of the cost.
On borrowing, eight times as many parents said their children would use only federal loans (32 percent) than only private ones (4 percent). More than half of parents were planning on a combination of the two, and a tenth didn’t know which type of loans their children would borrow.
Confusion was common: About a third of parents said they weren’t knowledgeable about the differences between federal and private student loans. And only 40 percent of parents planning to borrow thought their children fully understood the debt burden they would carry upon graduation.
Discover Student Loans, part of the financial-services company that released the survey, urged students and parents to examine interest rates, origination fees, and repayment options. “Families should compare federal and private student loans to see which kinds of loans are best,” PK Parekh, vice president of the lender, said in a written statement.
But the survey—of one thousand parents, conducted in July by an independent firm—didn’t reflect much confidence in guidance from banks and lenders. Just 3 percent of respondents said those entities were the most reliable source of information about paying for college. Almost half of parents pointed to colleges’ financial-aid offices as the best source, followed distantly by personal financial advisers, friends and family, the Internet, and high-school guidance counselors.Return to Top