Now is when high school students are receiving acceptance letters to college and deciding where to attend. One factor that students and parents and not giving enough consideration is how much the college will cost, and how much debt the student will end up with in four years.
Next Step Magazine, a leading college, career and life-planning publication for high school students, which is distributed in more than 20,500 high schools across the country, just conducted a poll of parents regarding how much they have saved for their child's education, and how they plan to pay for it. Some of the findings are:
- nearly all parents (93.9%) responded that it is extremely/very important that their child obtain a 4-year college degree, yet 52.4%, have saved less than $5,000
- 26.9% waited until their child's junior/senior year of high school before discussing the issue of paying for college, and 29.0% have not discussed it at all
- of parents who had their college bills paid for completely, only 35%, are willing to fully fund their child's education.
What will parents do to help?
- 22.7% would take on a second job
- 14.4% would go back to work (if currently stay at home)
Next Step Magazine's Annual Parent Poll Finds Most Teens
Will Carry Substantial College Financial Burden on Their Own
- Importance of Four-Year Degree has Some Parents Taking on
Loans, Second Jobs or Heading Back to Work to Help Out -
ROCHESTER, NEW YORK, January 5, 2007 - Next Step Magazine announced the results of its annual Parent Poll, finding that while nearly all parents surveyed, 93.9%, responded that it is extremely or very important that their child obtain a four-year college degree, only 12.1 % have saved more than $25,000 toward their child's education. In fact, the majority of parents, 52.4%, have saved less than $5,000. With costs for four years at an in-state public college averaging more than $51,000 and four years at a private college now topping $121,000 (College Board's Trends in College Pricing 2006) the poll underscores the enormous financial responsibilities teens will face as they head off to college.
Next Step Magazine is a college, career and life-planning magazine for high school students and their parents distributed in more than 20,500 high schools across the country. While their savings are low, parents say they will find other ways to pay the tuition bills:
24.4% would take out a home equity loan
22.7% would take on a second job
15.1% will take out loans
14.4% would go back to work (if currently stay at home)
In addition to financial help:
60.1% will encourage their child to attend a state university to save money
37.0% would be willing to let their child live at home while attending a local college to save money.
"Seventy-three percent of parents expect their child to take out college loans, requiring their child make adult financial decisions at an early age," said Next Step Magazine founder and publisher, David Mammano.
"Teens need to learn how and where to spend their money so they do not begin the next phase of life already burdened with substantial debt, making it difficult for them to purchase homes, contribute to 401Ks and save for their futures."
Delivering the Bad News
With so few parents saving for college, the poll looked at when or if parents spoke to
their child about their college savings/financial plan, in order give their child a chance to start saving.
· 24.6%, spoke to them at age 14, giving their child years to start saving.
· 26.9% waited until their child's junior/senior year of high school (ages 17 and 18) giving them little time to put money away.
· 29.0% have not yet discussed the issue.
How their Own College Education was Financed
Parents were also polled about their own college funding. Interestingly, of those whose parents paid 100% of their college bills, only one-third, 35%, are willing to fully fund their child's education. Of those who had to pay 100% of their way through college, 79% expect their children to do the same and take out loans.
Comparisons from 2005
Compared with last year's poll, more parents have made the effort to save for their child's education. Last year's parent poll found that 37% of parents had not saved anything, while this year, the number dropped significantly to only 10%.
This year, two-thirds (68%) of parents are willing to pay for more than 4 years of college if their child doesn't graduate on time. That number is 11% higher than last year's poll, showing the growing importance parents place on a four-year degree.
The online survey was distributed to 6,461 parents who have at least one child age 13 or older and who are registered in the Next Step Magazine database. 445 parents completed the survey.